ECONOMIC  STATESMANSHIP 


ECONOMIC 

STATESMANSHIP 


THE  GREAT  INDUSTRIAL  AND  FINANCIAL 
PROBLEMS  ARISING  FROM  THE  WAR 


By  J.  ELLIS  BARKER 


AUTHOR  OF 

“THE  GREAT  PROBLEMS  OF  BRITISH  STATESMANSHIP,”  “MODERN  GERMANY,” 


THE  FOUNDATIONS  OF  GERMANY, 


SECOND  EDITION 

CONTAINING  TEN  ADDITIONAL  CHAPTERS 


NEW  YORK 

E.  P.  DUTTON  &  CO. 

1920 

BOSTON  COLLEGE  LIBRARY 
CHESTNUT  HILL,  HASS, 


First  Edition  ....  November,  1918 
Second  Edition  ....  January,  1920 


101865 


DEDICATED 


TO  THE  MEMORY  OE  THE  LATE 


EARL  GREY 


CONTENTS  OF 


“THE  GREAT  PROBLEMS  OF 
BRITISH  STATESMANSHIP” 

THE  COMPANION  VOLUME  TO  THIS  BOOK 

CHAPTER 

I.  The  Peace  Congress  and  After 

II.  The  Problem  of  Constantinople 

III.  The  Problem  of  Asiatic  Turkey 

IV.  The  Problem  of  Austria-Hungary 

V.  The  Problem  of  Poland 

VI.  The  German  Emperor’s  Position 

VII.  Britain’s  War  Finance  and  Economic  Future 

VIII.  Britain’s  Coming  Industrial  Supremacy 

IX.  Democracy  and  the  Iron  Broom  of  War 

X.  How  America  became  a  Nation  in  Arms 

XI.  An  Anglo-American  Reunion 
Analytical  Index 

The  Times. — “  Mr.  Barker  is  always  well  informed,  and  he 
brings  wide  reading  and  great  industry  to  bear  upon  these 
questions,  which  are  at  the  moment  of  such  vital  importance, 
and  all  that  he  says  is  worth  attention.” 

The  Morning  Post. — “This  learned  and  illuminating 
book.” 

The  Glasgow  Herald. — “No  one  in  the  decade  preceding 
the  war  did  more  to  warn  Great  Britain  and  the  world  at 
large  of  the  designs  of  world-dominaton  cherished  by 
Germany  than  Mr.  J.  Ellis  Barker.” 


PREFACE  TO  THE  SECOND  EDITION 


Economic  Statesmanship  has  been  very  kindly  received 
by  both  Press  and  public.  The  1,800  copies  of  the  first 
edition  were  quickly  sold  out,  and  as  there  was  a  con¬ 
tinued  demand  for  the  book  the  question  of  a  new  edition 
had  to  be  considered. 

Some  of  my  critics,  while  giving  unstinted  praise  to 
the  work,  expressed  regret  that  I  had  not  treated  in  it 
various  important  economic  problems  which  have  come 
to  the  forefront  since  the  time  when  the  book  went  to 
press.  Others  complained  that  I  had  not  made  use  of 
the  numerous  and  very  valuable  reports  published  by  the 
British  Board  of  Trade  and  the  Ministry  of  Reconstruc¬ 
tion,  the  majority  of  which,  unfortunately,  appeared  too 
late  for  consideration  and  use.  As  they  had  urged  me 
to  make  good  these  omissions  should  a  new  edition  be 
called  for,  I  reluctantly  resolved  to  undertake  the  labour 
of  expanding  and  improving  the  second  edition  in  accord¬ 
ance  with  their  wishes. 

The  present  edition  is  a  very  greatly  enlarged  one. 
Ten  chapters,  running  to  more  than  200  pages,  have  been 
added  to  the  original  fifteen  chapters.  About  100  pages 
of  new  matter  are  devoted  to  an  examination  of  the 
economic  position  and  future  of  Russia  and  of  Japan, 
to  the  problem  of  the  British  Merchant  Marine  and  of 
the  British  Inland  Transport  System,  to  the  British  Coal 
Problem,  and  to  the  Land  and  Housing  Problem  in  town 
and  country.  In  another  100  pages  the  relations  between 

vii 


i 


PREFACE  TO  SECOND  EDITION 


viii 

Capital  and  Labour  are  exhaustively  discussed.  Par¬ 
ticular  attention  is  given  to  the  roots  of  national  pros¬ 
perity,  to  the  limitation  of  output,  to  the  recent  anti- 
capitalist  agitation,  and  to  the  demands  for  the  nationalisa¬ 
tion  of  industries,  for  the  penal  taxation  of  wealth  and 
income,  and  for  the  institution  of  a  six-hour  day. 

The  200  pages  added  possess  two  special  features: 
Firstly,  they  contain  valuable  extracts  from  all  the 
Reports  of  the  various  expert  Committees  which,  towards 
the  end  of  the  War,  were  appointed  by  the  Government 
to  inquire  into  the  position  and  future  of  the  British 
industries  and  of  the  trade  of  the  world.  Secondly,  in 
two  lengthy  chapters  entitled  “  Labour  Unrest :  Its  Causes 
and  Its  Permanent  Cure,”  I  have  endeavoured  to  analyse 
the  causes  of  the  trouble  in  the  industrial  world  and  to 
propose  a  scheme  for  the  permanent  conciliation  of  Capital 
and  Labour  which,  I  hope,  may  be  found  to  be  practical, 
workable,  logical,  and  inevitable. 

As  intending  purchasers  who  possess  the  first  edition 
may  wish  to  be  able  to  differentiate  at  a  glance  the  new 
matter  from  the  old,  I  thought  it  only  fair  to  make  this 
easy  for  them.  I  have  therefore  not  sandwiched  the 
chapters  among  the  old,  but,  disregarding  their  proper 
and  logical  sequence,  have  placed  them  all  at  the  end  of 
the  book.  The  old  matter  ends  on  page  399,  and  the 
new  chapters  begin  on  page  400  and  run  on  to  the  end. 

Mr.  W.  F.  W.  King,  who  at  the  time  belonged  to  the 
15th  Tank  Battalion,  has  very  kindly  drawn  my  attention 
to  a  number  of  misprints  and  mistakes,  and  has  made 
some  valuable  suggestions,  which  I  have  carried  out  as 
far  as  possible,  and  for  which  I  would  express  to  him  my 
very  best  thanks. 

J.  ELLIS  BARKER. 

London, 

November,  1919. 


PREFACE  TO  THE  FIRST  EDITION 

National  economy  is  obviously  a  part,  and  a  most  im¬ 
portant  part,  of  practical  statesmanship.  In  the  follow¬ 
ing  pages  the  great  industrial  and  financial  problems 
which  have  arisen  owing  to  the  War  are  discussed  from 
the  statesman’s  point  of  view.  General  principles  may 
be  popular  among  the  Well-meaning  but  ill-informed,  and 
they  may  win  the  votes  of  the  multitude,  especially  if  they 
lend  themselves  to  being  converted  into  resounding  and 
easily  remembered  catchwords.  However,  the  success 
of  a  business  policy  depends  not  upon  its  attractiveness 
and  its  plausibility,  but  upon  its  soundness,  upon  exact 
information,  upon  facts.  Therefore,  the  following  pages 
are  filled  not  with  delusive  generalities,  but  with  docu¬ 
mentary  and  statistical  evidence,  with  authoritative 
pronouncements  and  data,  which  are  rather  inaccessible 
to  most.  The  present  book  is  a  companion  volume  to 
The  Great  Problems  of  British  Statesmanship,  of  which  the 
■second  edition  was  recently  published  by  Mr.  John 
Murray. 

It  is  dangerous  to  experiment  u}3on  the  body  politic. 
In  matters  economic  prosaic  experience  is  a  safer  guide 
than  abstract  speculation.  The  Americans  have  been 
extraordinarily  successful  in  economic  endeavour  and  in 
the  art  of  Empire  building.  In  a  little  more  than  a  cen¬ 
tury  they  have  reared  the  most  powerful  and  the  wealthiest 
State  in  the  World  on  the  broadest  democratic  basis. 
Invaluable  lessons  may  be  learned  from  the  study  of 

ix 


X 


PREFACE  TO  FIRST  EDITION 


American  affairs.  The  feature  of  this  book  is  that  it 
analyses  the  causes  of  America’s  success  and  that  it 
considers  the  great  economic  problems  of  the  future  in  the 
light  of  American  experience,  so  that  England  and  the 
Empire  may  learn  from  America’s  example. 

The  present  volume  owes  its  origin  to  that  great  and 
good  man,  the  late  Earl  Grey.  Having  attracted  liis 
attention  by  my  advocacy  of  Imperial  organisation  and 
of  an  Anglo-American  reunion,  he  induced  me  to  spend 
six  months  in  the  United  States  and  in  Canada  in  order 
to  study  their  political,  social,  and  economic  conditions. 
He  furnished  me  with  the  best  introductions,  and  I  pro¬ 
mised  him  to  embody  my  impressions  in  a  book.  My 
knowledge  of  American  affairs  is  largely  due  to  Lord 
Grey’s  action.  Had  he  been  spared,  I  should  have  dedi¬ 
cated  to  him  this  volume,  which,  gratefully  and  sorrow¬ 
fully,  I  now  inscribe  to  his  memory. 

Although  the  bulk  of  the  volume  has  previously 
appeared  in  the  Nineteenth  Century  and  After  and  the 
Fortnightly  Review ,  this  woyk  is  not  a  collection  of  dis¬ 
jointed  essays.  The  original  articles  were  written  with 
a  view  to  their  subsequent  publication  in  book  form, 
and  I  would  very  sincerely  thank  the  editors  of  the 
periodicals  mentioned  for  allowing  me  to  reprint  my 
contributions. 

The  contents  of  this  book  are,  for  the  convenience  of 
readers,  briefly  summarised  in  the  Introduction.  A  full 
Analytical  Index  at  the  end  of  the  volume  should  facili¬ 
tate  its  uso  as  a  Work  of  reference. 

J.  ELLIS  BARKER. 

London, 

October ,  1918. 


V 


TABLE  OF  CONTENTS 

CHAPTER  PAGE 

I.  INTRODUCTION  ------  1 

II.  COAL,  IRON — AND  THE  DOMINATION  OF  THE  WORLD  -  13 

III.  BRITAIN’S  TRUE  WEALTH  AND  THE  RELATIVE  UNIM¬ 

PORTANCE  OF  THE  WAR  DEBT  -  -  -  38 

IV.  THE  INEFFICIENCY  OF  THE  BRITISH  TRANSPORT  SYSTEM 

AND  OF  BRITISH  AGRICULTURE — SOME  LESSONS  FROM 
AMERICA  -  -  -  -  -  -  71 

V.  THE  INEFFICIENCY  OF  BRITISH  INDUSTRIAL  PRODUC¬ 
TION - 1.  THE  POSSIBILITY  OF  TREBLING  OUTPUT  -  105 

VI.  EDUCATION  AND  ECONOMIC  SUCCESS  -  -  -  143 

VII.  LABOUR  AND  CAPITAL  AFTER  THE  WAR  -  -  180 

VIII.  THE  PROBLEM  OF  THE  TARIFF - WOULD  A  TARIFF  HARM 

LANCASHIRE  -  -  -  -  -  199 

IX.  THE  PROBLEM  OF  THE  TARIFF - THE  BRITISH  AND  THE 

AMERICAN  MERCHANT  MARINE  -  -  -  228 

X.  THE  ECONOMIC  POSITION  AND  FUTURE  OF  FRANCE  -  243 

XI.  THE  PROBLEM  OF  ALSACE-LORRAINE  -  -  -  272 

XII.  THE  ECONOMIC  POSITION  AND  FUTURE  OF  ITALY  -  295 

XIII.  CAN  GERMANY  PAY  AN  INDEMNITY  ? — HER  NATURAL 

WEALTH  ......  329 

XIV.  CAN  GERMANY  PAY  AN  INDEMNITY  — HER  PRODUCTION 

AND  TRADE  ......  349 

XV.  THE  FUTURE  AND  THE  NATURAL  RESOURCES  OF  THE 

UNITED  STATES  -  -  -  -  -  373 


XI 


xii  TABLE  OF  CONTENTS 

XVI.  THE  ECONOMIC  POSITION  AND  FUTURE  OF  RUSSIA  -  400 

XVII.  THE  ECONOMIC  POSITION  AND  FUTURE  OF  JAPAN  -  426 

XVIII.  THE  BRITISH  COAL  PROBLEM  AND  THE  SANKEY  REPORT  443 

XIX.  THE  DEVELOPMENT  OF  THE  BRITISH  RAILWAYS, 

WATERWAYS,  AND  ROADS  -  460 

XX.  THE  BRITISH  MERCHANT  MARINE  AND  THE  EMPIRE: 

SHOULD  THE  EMPIRE  TRADE  BE  RESERVED  TO 
EMPIRE  SHIPPING  f  -  -  -  -  475 

XXI.  THE  BRITISH  LAND  AND  HOUSING  PROBLEM  IN  THE 

COUNTRY  DISTRICTS  ....  492 

XXII.  THE  BRITISH  LAND  AND  HOUSING  PROBLEM  IN  THE 

TOWNS  ......  504 

XXIII.  THE  INEFFICIENCY  OF  BRITISH  INDUSTRIAL  PRO¬ 
DUCTION — II.  .....  516 

XXIV.  LABOUR  UNREST:  ITS  CAUSES  AND  ITS  PERMANENT 

CURE  ......  545 

XXV.  LABOUR  UNREST:  ITS  CAUSES  AND  ITS  PERMANENT 

cure  ( continued )  .....  580 

ANALYTICAL  INDEX  -  -  -  -  -  615 


ECONOMIC  STATESMANSHIP 


CHAPTER  I 
INTRODUCTION 

♦  -  *  i 

The  War  has  shown  even  to  the  blindest  that  military 
power  and  economic  strength  are  exceedingly  closely 
interwoven,  that  wars  may  be  lost  or  won  not  only  on 
the  battlefield,  but  also  in  the  school,  the  laboratory,  the 
mine,  the  mill*  and  the  factory.  It  follows  that  the 
policy  of  laissez  faire,  the  policy  of  drift  in  economic 
matters,  in  which  the  security  of  the  State  is  subordinated 
to  the  liberty  of  action  of  individuals  who  merely  strive 
to  benefit  themselves,  has  become  discredited.  The 
policy  of  laissez  faire,  of  individualism,  is  a  policy  which 
may  be  summed  up  in  the  phrase,  “  Everyone  for  him¬ 
self.”  At  last  it  has  become  clear  even  to  the  most 
narrow-minded  individualists  that  nation-wide  co-opera¬ 
tion,  the  harmonised  and  ordered  effort  of  all  the  citizens 
for  the  furtherance  of  the  common  good,  is  a  more  potent 
factor  for  ensuring  the  national  welfare  than  unfettered 
competition,  an  internecine  war  of  all  against  all,  the 
bellum  omnium  contra  omnes  of  Thomas  Hobbes. 

Not  so  very  long  ago  the  United  Kingdom  Was  by 
far  the  largest  producer  of  iron  and  steel  in  the  world, 
but  during  the  last  few  decades  her  predominance  in  the 
iron  and  steel  industry  has  disappeared.  Great  Britain 
allowed  the  German  iron  and  steel  industry  to  overtake 
the  British  industry.  Those  who  pointed  out  that  wars 

1 


2 


INTRODUCTION 


are  made  with  iron  and  steel,  that  a  war  with  Germany 
was  almost  inevitable,  and  who  warned  England,  as  I 
have  unceasingly  done  ever  since  1900,  of  the  danger 
Which  she  would  run  owing  to  the  insufficient  strength 
of  her  iron  industry  in  case  of  a  War  with  Germany,  were 
-  told  by  the  British  advocates  of  the  policy  of  laissez 
faire,  of  drift  and  neglect,  that  they  Were  seeing  ghosts, 
that  there  would  be  no  War  between  England  and  Ger¬ 
many,  that  the  relative  decline  of  the  British  iron  in¬ 
dustry  did  not  matter,  that  other  British  industries, 
such  as  cotton  manufacturing  and  ship  building,  were 
exceedingly  prosperous  and  were  more  profitable  than 
iron  making. 

While  England,  oblivious  of  the  fact  that  modern 
military  power,  and  modern  industrial  power  as  well,  is 
based  upon  iron,  allowed  her  iron  and  steel  industry  to 
stagnate  and  to  decline  if  compared  with  the  iron  in¬ 
dustry  in  Germany  and  the  United  States,  the  German 
Government  fostered  the  native  iron  industry  with  all 
means  in  its  power.  The  result  of  energetic  and  planful 
development  in  Germany  and  of  Governmental  in¬ 
difference  and  neglect  in  England  was  that  at  the  out¬ 
break  of  war  Germany  manufactured  fully  twice  as  much 
iron  and  steel  as  did  Great  Britain,  that  in  iron  and  steel 
Germany  Was  twice  as  strong  as  the  United  Kingdom. 
The  vast  strength  of  Germany  which  the  War  revealed 
Was  largely  due  to  the  gigantic  power  of  that  country’s 
iron  and  steel  industry.  Had  the  United  Kingdom,  in 
1914,  possessed  that  overwhelming  superiority  in  the 
iron  and  steel  industries  which  she  had  in  1880,  Germany 
Would  never  have  dared  to  challenge  her. 

In  the  modern  world  the  military  power  of  nations 
depends  very  largely  on  their  industrial  power.  As 
modern  industry  is  based  upon  the  lavish  use  of  coal 
and  iron,  only  those  nations  can  become  industrially  and 


INTRODUCTION 


3 


militarily  powerful  which  possess,  or  control,  ample 
stores  of  coal  and  of  iron  ore.  The  great  coal  and  iron 
mines  are,  rightly  considered,  Nature’s  power-house  and 
Nature’s  arsenal.  Germany  owes  her  great  industrial 
prosperity,  and  her  extraordinary  military  strength  as 
Well,  largely  to  the  fact  that  she  had  within  her  frontiers 
of  1914  very  extensive  iron  mines,  and  by  far  the  largest 
coal  deposits  in  Europe.  Her  store  of  coal  was  in  1914 
twice  as  large  as  that  of  the  United  Kingdom.  All  the 
most  important  coal  fields  and  iron  mines  on  the  Conti¬ 
nent  of  Europe  a,re  situated  either  in  Germany  or  close 
to  Germany’s  borders.  Alter  the  outbreak  of  the  War 
Germany  seized  the  principal  coal  and  iron  mines  of 
Belgium,  France,  Poland  and  Russia.  Thus  she  obtained 
almost  a  monopoly  in  the  production  of  coal  and  iron 
on  the  European  Continent,  and  her  leaders  declared 
that  Germany  would  retain  the  conquered  coal  and  iron 
fields,  the  possession  of  which  would  make  Germany 
absolutely  predominant  in  Europe,  both  militarily  and 
industrially,  and  would  at  the  same  time  permanently 
disarm  her  opponents. 

Taught  by  the  bitter  experience  of  war,  the  statesmen 
of  the  nations  leagued  against  Germany,  who  had  hitherto 
disregarded  the  vast  importance  of  the  economic  factor 
as  a  source  of  political  and  military  power,  have  begun 
to  recognise  the  influence  of  coal  and  iron  upon  states¬ 
manship,  upon  national  greatness,  strength  and  influence. 
Germany’s  principal  coal  and  iron  deposits  are  situated 
close  to  her  frontiers  of  1914.  By  far  her  largest  iron 
mines  are  found  in  Lorraine,  and  nearly  one-half  of 
Germany’s  coal  occurs  in  the  Polish  part  of  the  Province 
of  Silesia.  The  nation  which  dominates  coal  and  iron 
may  dominate  the  world.  France  and  Italy  are  extra¬ 
ordinarily  poor  in  coal.  That  fact  alone  explains  their 
insufficient  military  and  industrial  strength.  The  settle- 


4 


INTRODUCTION 


ment  at  the  peace  should  lead  not  only  to  territorial 
rearrangements  in  accordance  with  the  principle  of 
nationality,  but  to  rearrangements  on  economic,  and 
especially  on  mineralogical,  grounds  as  well.  The  various 
aspects  of  the  coal  and  iron  problem,  and  the  influence 
of  coal  and  iron  upon  national  wealth,  strength,  and 
population  increase  will  be  found  discussed  in  the  first 
chapter,  “  Coal,  Iron — and  the  Domination  of  the  World.” 

Many  weak  and  short-sighted  men,  prompted  by 
financial  timorousness,  have  advocated  “  a  peace  by 
negotiation.”  They  have  told  us  that  Great  Britain 
was  unable  to  continue  the  War  because  her  trade,  in¬ 
dustries  and  finances  would  be  ruined.  They  have  told 
us  that  the  people  Would  be  overwhelmed  by  the  gigantic 
burden  of  the  War  Debt,  which  indeed  threatens  to 
approximate  what  is  usually,  but  mistakenly,  called  the 
British  National  Wealth.  In  Chapter  III.,  entitled 
“  Britain’s  True  Wealth  and  the  Relative  Unimportance 
of  the  War  Debt,”  I  have  endeavoured  to  show  that 
these  fears  are  utterly  unfounded.  The  British  War 
Debt,  however  large  it  may  be,  will  be  limited  in  amount, 
while  the  wealth  of  the  British  people,  as  that  of  every 
vigorous  and  advancing  nation,  is  susceptible  to  indefi¬ 
nite  expansion,  is  unlimited,  and  is  absolutely  im¬ 
measurable.  According  to  the  best  statistics  available 
the  so-called  national  wealth  of  the  United  Kingdom  has 
grown  tenfold  during  the  last  century,  and  it  should  grow 
considerably  more  than  tenfold  during  the  coming 
century,  because  the  vast  improvements  made  in  all 
productive  processes  are  bound  to  accelerate  increasingly 
the  accumulation  of  wealth.  Her  National  Debt,  how¬ 
ever  large  it  may  be,  will  not  impoverish  Great  Britain 
if  she  is  victorious  and  if  she  retains  her  great  wealth - 
creating  resources.  A  complete  victory  will  be  finan¬ 
cially  far  more  advantageous  than  a  mere  stopgap  peace. 


INTRODUCTION 


5 


The  War  has  been  fought  for  the  British  Empire,  for 
the  British  race.  It  is,  therefore,  only  fair  that  all  parts 
of  the  Empire  should  share  in  bearing  the  burden  of  the 
War  Debt  in  accordance  with  their  economic  strength. 
The  potential  wealth  of  the  British  Empire  is  absolutely 
unfathomable.  During  the  last  century  the  wealth  of 
the  United  States  has  statistically  grown  about  a  hundred¬ 
fold.  Hence  the  wealth  of  the  British  Empire  should 
increase  at  a  similar,  and  perhaps  at  a  faster,  rate  during 
the  coming  century,  provided  the  Dominions  and  Colonies 
be  developed  with  American  energy  and  ability,  and  in 
accordance  with  the  American  example.  History  teaches 
us  that  successful  wars,  however  costly,  do  not  impoverish, 
but  enrich,  nations  possessed  of  energy  and  of  great 
national  resources.  The  Napoleonic  War  created  the 
industrial  greatness  of  the  United  Kingdom,  and  the 
terribly  costly  Civil  War  that  of  the  United  States.  The 
present  war  should  not  prove  an  exception  to  the  general 
rule. 

Peace  and  ease  beget  sloth.  Hard  times  beget  energy 
and  intelligent  exertion.  Increased  taxation  should  act 
as  a  powerful  spur  to  production,  and  should  lead  to  a 
rapid  increase  of  the  national  income  and  of  the  national 
wealth.  In  Chapters  IV.  and  V.  I  have  endeavoured 
to  show  that  British  Agricultural  production  can  be  vastly 
increased,  and  that  British  industrial  production  can 
easily  be  trebled,  by  introducing  the  best  American  in¬ 
dustrial  methods  and  the  most  powerful  American 
machinery.  Trebled  production,  which  is  perfectly 
feasible  throughout  the  United  Kingdom,  should  treble 
the  income  of  masters  and  workers,  should  treble  the 
comforts  of  the  people,  should  treble  the  national  income 
and  the  national  wealth,  and  should  more  than  treble 
the  taxable  capacity  of  the  people.  The  Americanisation 
of  the  British  industries  has  already  begun,  and  it  has 

2 


6  INTRODUCTION 

vastly  benefited  the  national  industries  and  the  workers 
engaged  in  them. 

The  rapid  development  of  the  vast  territories  of  the 
United  States,  which  not  long  ago  were  a  wilderness,  is 
due  chiefly  to  the  energetic  and  far-sighted  railway 
policy  pursued  by  the  American  Government  and  people. 
The  Great  Republic  has  a  far  larger  mileage  of  railways 
than  has  the  whole  of  the  British  Empire,  although  the 
area  of  the  British  Empire  is  four  times  as  great  as  that 
of  the  United  States.  Needless  to  say,  the  energetic 
development  of  the  British  Imperial  railway  system 
would  greatly  benefit  not  only  the  thinly  populated 
territories  across  the  sea,  but  would  prove  extremely 
advantageous  to  the  British  iron  and  steel  industry, 
and  to  industry  and  trade  in  general  throughout  the 
Empire.  The  American  railways  are  exceedingly  effi¬ 
cient.  They  charge  the  lowest  freight  rates  in  the  world, 
while  the  British  railways  are  exceedingly  inefficient,  and 
are  hampering  the  development  of  the  national  industries 
by  their  extraordinarily  and  scandalously  high  charges, 
which  are  the  natural  result  of  their  inefficiency.  The 
reform  of  the  British  and  of  the  Imperial  transport 
system  in  accordance  with  the  example  set  by  the  Ameri¬ 
can  Railways,  the  activities  of  which  are  described  in 
Chapter  IV.,  should  have  the  happiest  results  upon 
Motherland  and  Empire. 

The  intellectual  and  the  material  progress  of  nations 
depends  partly  on  the  inborn  gifts  of  the  people,  partly, 
and  very  largely,  on  their  acquired  abilities  and  character, 
on  their  moral  and  practical  education.  The  wonderful 
economic  success  of  the  United  States  is  undoubtedly 
very  largely  due  to  their  wonderful  educational  system. 
Education  may  be  either  autocratic  or  democratic. 
Hitherto  British  educationalists  have  endeavoured,  and 
I  think  mistakenly,  to  shape  British  education  upon  the 


INTRODUCTION 


7 


model  of  autocratic  Prussia.  They  may  learn  much 
from  the  democratic  educational  system  of  the  United 
States,  as  I  have  endeavoured  to  show  in  Chapter  VI., 
entitled  “  Education  and  Economic  Success.” 

An  industrial  nation  can  flourish  only  if  employers  and 
employed,  capital  and  labour,  work  together  in  cordial 
harmony.  The  future  relations  between  the  directors 
of  the  national  industries  and  their  workers  are  con¬ 
sidered  in  Chapter  VII.,  entitled  “Labour  and  Capital 
after  the  War.”  The  workers  of  a  nation  cannot  be 
expected  to  do  their  best  unless  they  are  satisfied,  and 
they  cannot  be  expected  to  be  satisfied  unless  they  are 
prosperous.  Underpaid  labour  is  inefficient  labour. 
Nothing  is  more  wasteful  on  the  part  of  an  industrial 
nation  than  to  allow  its  workers  to  live  in  poverty. 
Before  the  war  millions  of  British  workers,  especialfy  the 
unskilled  and  the  agricultural  labourers,  lived  not  merely 
in  poverty,  but  in  Want.  Unfortunately,  the  British 
Workers  have  hitherto,  owing  to  socialist  teachings,  seen 
in  the  directors  of  industry  and  in  the  capitalists  not  a 
useful  and  necessary  class,  but  an  enemy,  and  their 
leaders  have  taught  them  the  extraordinary  doctrine 
that  the  workers  can  benefit  themselves  most  by  insisting 
upon  the  highest  possible  wage  in  exchange  for  the  lowest 
possible  production.  Wishing  “  to  make  the  work  go 
round,”  British  workers  have  systematically  restricted 
their  output,  and  have  opposed  the  introduction  of  the 
most  perfect  labour-saving  machinery,  whereas  the 
American  Workers  have  insisted  upon  large  wages,  but 
have  willingly  Worked  the  most  powerful  and  the  most 
modern  machinery  at  its  full  speed.  The  result  has  been 
that  the  output  of  the  American  workers  has,  as  I  have 
shown  by  exact  and  reliable  figures,  been  three  times 
as  great  as  the  output  of  the  British  Workers  engaged  in 
identical  callings.  In  other  Words,  a  single  American 


ft 


INTRODUCTION 


Worker  has  produced  as  large  a  quality  of  goods  as  three 
British  workers  employed  in  the  corresponding  industry. 

The  prosperity  of  the  Workers  depends  obviously  not 
on  the  nominal  amount  of  their  Wages,  but  on  their  pur¬ 
chasing  power,  for  people  cannot  eat  money.  The  pros¬ 
perity  of  the  masses  is  seen  not  by  high  money  wages, 
but  by  high  individual  consumption.  Money  is  merely  a 
symbol,  a  token,  which  in  itself  is  valueless.  High  con¬ 
sumption  among  the  masses  of  a  nation  is,  of  course, 
impossible  unless  there  is  a  correspondingly  high  national 
production.  Low  national  production  means  poverty 
to  the  workers  whatever  the  nominal  amount  of  the 
money  Wages  may  be.  The  wages  of  the  American 
Workers  were  before  the  war  about  three  times  as  high 
as  were  British  wages,  because  the  American  workers 
produced  three  times  as  much  as  their  British  colleagues, 
and,  producing  three  times  as  much  as  the  British  workers, 
they  consumed  approximately  three  times  as  much. 
Happily  the  British  workers  and  the  majority  of  their 
leaders  have  begun  to  recognise  that  in  industrial  matters 
they  have  mistaken  the  shadow  for  the  substance,  that 
they  have  followed  a  suicidal  policy  in  restricting  output, 
that  prosperity  among  the  workers  requires  that  the  goods 
produced  in  field,  mine  and  factory  should  be  plentiful, 
not  scarce.  Hitherto  the  British  workers  have  injured 
the  national  industries,  the  capitalists,  the  middlemen, 
and  especially  themselves,  by  acting  like  greedy  specu¬ 
lators,  by  creating  an  artificial  scarcity  of  goods. 

After  the  W ar  Great  Britain  will  presumably  impose  a 
Protective  Tariff  upon  certain  imports,  giving  a  pre¬ 
ference  to  the  Dominions  and  Colonies  and  to  her  Allies. 
Those  who  oppose  the  reintroduction  of  a  Protective 
Tariff  base  their  attitude  mainly  upon  certain  assertions 
which,  at  first  sight,  seem  very  plausible.  For  instance, 
they  maintain  that  Free  Trade  has  given  Great  Britain 


INTRODUCTION 


9 


her  great  cotton  industry,  and  that  Protection  would 
destroy  it;  that  Free  Trade  has  given  England  her 
maritime  supremacy,  while  Protection  has  ruined 
the  formerly  so  flourishing  ship-building  and  ship¬ 
building  industries  of  the  United  States,  etc.  The  ques¬ 
tion  how  a  Protective  Tariff  would  affect  the  British 
cotton  industry  is  discussed  at  length  in  Chapter  VIII., 
“  Would  a  Tariff  harm  Lancashire  ?”  I  have  endea¬ 
voured  to  show  in  it  that  the  fears  of  the  Free  Traders 
regarding  the  British  cotton  industry  are  unjustified. 
The  effect  of  Protection  and  Free  Trade  upon  shipping  is 
considered  in  Chapter  IX.,  “  The  British  and  American 
Merchant  Marine.”  I  have  shown  in  it  that  the  decline 
of  the  American  ship -building  industry  was  caused  by  the 
combined  effect  of  the  Civil  War  and  of  the  advent  of  the 
iron  ship  at  a  time  when  England  dominated  the  iron 
industry  of  the  world,  and  when  the  American  iron  in¬ 
dustry  was  quite  insignificant.  Moreover  the  wages  of 
the  American  shipbuilders  and  of  the  American  sailors 
were  so  much  higher  than  the  corresponding  British  wages 
that  the  American  shipping  trade  could  not  compete 
with  the  British  shipping  trade,  although  the  American 
shipping  industry  had  been  given  free  imports  for  all  the 
materials,  etc.,  required  in  the  building  and  the  fitting 
out  of  ships. 

France  has  suffered  terribly  through  the  War.  A 
prosperous  and  powerful  France  is  necessary  for  the 
peace  of  the  world,  for  there  ought  to  be  an  adequate 
counterpoise  to  Germany  on  the  Continent  of  Europe. 
Unfortunately  the  population  of  France  has  remained 
practically  stationary  for  many  decades,  while  that  of 
Germany  has  rapidly  increased.  If  the  population  of 
France  should  continue  stagnating  and  that  of  Germany 
should  continue  progressing  as  quickly  as  it  has  done 
hitherto,  France  would  sink  to  the  place  of  a  second- 


10 


INTRODUCTION 


rate  or  a  third-rate  Power  within  a  few  decades.  In 
Chapter  X.,  entitled  “  The  Economic  Position  and 
Future  of  France,”  I  have  tried  to  show  that  the  stag¬ 
nation  of  the  French  population  and  the  rapid  increase 
of  the  population  of  Germany  is  largely,  and  probably 
principally,  due  to  economic  causes.  The  vast  increase 
of  the  German  people  has  taken  place  exclusively  in  the 
towns,  and  especially  in  the  large  towns,  in  the  manu¬ 
facturing  centres.  The  population  of  the  German 
agricultural  districts  has  remained  as  stationary  as  that 
of  France.  The  rapid  increase  of  the  German  population 
was  made  possible  by  the  equally  rapid  expansion  of  the 
German  manufacturing  industries,  and  the  progress  of 
the  German  manufacturing  industries  was  due  to  Ger¬ 
many’s  vast  wealth  in  coal.  While  Germany  has  a 
superabundance  of  excellent  and  cheap  coal,  France,  like 
Italy,  suffers  from  a  scarcity  of  that  indispensable  mineral. 
Hence  France,  like  Italy,  Was  unable  to  develop  those 
large  manufacturing  industries  which  create  the  pros¬ 
perity  of  modern  nations,  and  enable  them  to  increase 
their  population  very  greatly.  A  political  and  military 
balance  between  France  and  Germany  can  obviously 
most  easily  be  created  by  transferring  part  of  the  super¬ 
abundant  mineral  Wealth  possessed  by  Germany  to 
France.  Such  a  transfer  might,  and  very  likely  would, 
lead  to  a  slackening  in  the  increase  of  the  German  race 
and  to  an  expansion  of  the  French  race. 

In  Chapter  XI.,  entitled  “  The  Problem  of  Alsace- 
Lorraine,”  I  have  dealt  very  fully  with  the  problem 
whether  the  population  of  these  two  provinces  is  French 
or  German  in  character,  and  I  have  shown  that,  although 
it  is  undoubtedly  German  by  race  and  language,  it  is 
French  by  choice  and  affection.  Since  1871  approxi¬ 
mately  700,000  people,  half  of  them  Women,  have  emi¬ 
grated  from  Alsace-Lorraine,  and  nearly  all  of  them  have 


INTRODUCTION 


11 


gone  to  France.  If  democracy  means  government  in 
accordance  with  the  will  of  the  people,  it  is  obvious  that 
Alsace-Lorraine  should  be  returned  to  France,  because 
the  people  detest  their  German  rulers,  and  wish  to  be 
reunited  to  France.  Alsace-Lorraine  possesses  exceedingly 
valuable  mineral  resources,  especially  gigantic  deposits 
of  excellent  iron  ore.  In  addition,  she  has  large  quanti¬ 
ties  of  potash  and  mineral  oil.  As  iron  is  indispensable 
for  warfare,  a  war  of  revenge  on  Germany’s  part  could 
most  easily  be  prevented  by  transferring  the  great  iron 
deposits  of  Lorraine  from  Germany  to  France. 

The  economic  position  of  Italy  is  one  of  very  great 
difficulty.  That  beautiful  country  is  equally  poor  in 
agricultural  and  in  industrial  resources.  The  develop¬ 
ment  of  agriculture  is  impeded  by  the  fact  that  the 
larger  part  of  the  country  consists  of  steep  and  barren 
mountains,  and  that  the  plains  consist  largely  of  fever- 
stricken  swamps.  The  seas  around  Italy’s  coast  contain 
little  fish,  and  the  country  is  exceedingly  poor  in  minerals. 
Italy  possesses  only  a  trifling  quantity  of  iron  ore  and 
practically  no  coal.  As  Italy  is  one  of  the  most  densely 
populated  countries  in  the  World — per  square  mile  the 
population  is  almost  as  great  as  that  of  the  United  King¬ 
dom — the  Italians  live  in  poverty.  Their  position  will 
be  a  difficult  one  after  the  conclusion  of  peace.  Lacking 
raw  products  of  every  kind,  and  being  unable  to  produce 
in  the  country  the  food  required,  the  Italians  have  made 
a  living*  largely  by  producing  for  sale  abroad  luxuries 
which  require  much  labour  and  little  raw  material. 
They  have  exported  food  luxuries  such  as  oranges,  lemons, 
olive  oil,  etc.,  and  manufactured  luxuries  such  as  silks, 
artistic  furniture,  and  so  forth.  After  the  War  all  nations 
will  have  to  practise  economy.  They  will  naturally  dis¬ 
courage  the  consumption  of  luxuries,  and  especially  of 
imported  luxuries,  to  the  grave  disadvantage  of  Italy. 


12 


INTRODUCTION 


Italy’s  povertjr  is  due  to  the  insufficiency  of  her  natural 
resources.  If,  at  the  peace,  she  should  find  herself 
burdened  with  a  huge  national  debt,  and  if,  at  the  same 
time,  those  valuable  expanding  industries  which  she  has 
created  should  be  crippled,  her  sufferings  would  be  terrible. 
Her  people  would  have  to  emigrate  in  millions.  The 
Allies  possess  obviously  a  superabundance  of  territory 
and  of  mineral  resources.  It  seems  only  just  that  the 
United  Powers  should  come  to  Italy’s  help  by  develop¬ 
ing  those  resources,  such  as  water  powers,  which  she 
possesses,  and  by  providing  the  country  with  an  ade¬ 
quacy  of  agricultural  soil  and  of  the  most  necessary  raw 
material,  especially  coal.  The  principal  data  relating 
to  this  problem  will  be  found  in  Chapter  XII.,  “  The 
Economic  Position  and  Future  of  Italy/’ 

The  cost  of  the  war  to  the  Allies  may  approximate 
£50,000,000,000,  an  amount  which  is  three  times  as  large 
as  Germany’s  national  wealth  was  estimated  to  be  in 
1914.  It  is  frequently  asserted  that  at  the  end  of  the 
war  Germany  will  be  ruined,  and  that  she  cannot  pay 
for  a  tithe  of  the  damage  she  has  done.  In  Chapters 
XIII.  and  XIV.,  entitled  “  Can  Germany  pay  an  In¬ 
demnity  ?”  I  have  shown  that  the  value  of  Germany’s 
coal,  iron  ore  and  potash  alone  should  come  to 
£237,678,000,000,  a  sum  wdiich  is  about  fifteen  times  as 
large  as  the  so-called  national  wealth  of  the  United 
Kingdom  Was  supposed  to  be  at  the  outbreak  of  the  war. 
Germany  can  pay  for  all  the  damage  she  has  done  in 
goods,  especially  in  raw  materials.  After  all,  goods  are  more 
valuable  than  money.  Money  is  only  valuable  because 
of  the  goods  which  it  will  buy.  Germany  has  shown  her 
appreciation  of  the  value  of  raw  materials  by  ruthlessly 
confiscating  the  coal,  the  iron  ore,  the  petroleum,  and 
the  harvests  of  her  opponents.  She  has  thus  created  a 
precedent  which  she  may  live  to  regret. 


CHAPTER  II 

COAL,  IRON— AND  THE  DOMINATION  OF  THE  WORLD* 

Coal  and  iron  are  the  twin  foundations  of  the  modern 
manufacturing  industries  and  of  modern  commerce,  and 
they  are  at  the  same  time  the  principal  sources  of  national 
power,  wealth,  and  population,  and,  therefore,  of  national 
armed  strength.  The  pre-eminence  of  the  Anglo-Saxon 
nations  and  of  Germany  in  the  manufacturing  industries, 
in  wealth,  and  in  national  power  is  due  not  merely  to 
racial  causes,  as  is  often  asserted,  hut  largely,  and  pro¬ 
bably  principally,  to  a  mineralogical  cause — to  the  fact 
that  Providence  has  given  gigantic  deposits  of  coal  and 
iron  to  the  United  States,  to  Great  Britain,  and  to  Ger¬ 
many,  and  only  insignificant  deposits  to  the  Latin  peoples, 
both  in  Europe  and  America,  and  to  the  Slavonic  nations. 
Professor  C.  R.  van  Hise,  of  Wisconsin  University,  stated 
in  his  excellent  book  The  Conservation  of  the  Natural 
Resources  of  the  United  States ,  published  in  1910 : 

“Coal  is  by  far  the  most  important  of  all  the  mineral 
products.  Next  to  coal  in  importance  is  iron.  These 
two  are  of  much  greater  consequence  than  all  the  other 
mineral  products  together.  The  existence  of  extensive 
coal  and  iron  fields  has  profoundly  influenced  modern 
civilisation.  The  greatest  commercial  nations  are  Ger¬ 
many,  England,  and  America,  and  each  has  extensive 
coal  and  iron  deposits.  ...  It  has  been  said  that  the 
nations  that  have  coal  and  iron  will  rule  the  world.” 

*  From  The  Nineteenth  Century  and  After,  April,  1918. 

13 


14  COAL,  IRON —AND  WORLD  DOMINATION 


The  great  majority  of  historians  and  of  political  writers 
have  completely  neglected  the  influence  of  the  economic 
factor  upon  history.  According  to  popular  conception, 
the  wars  of  the  past  have  been  caused  mainly  by  the 
unrestrained  ambitions  of  rulers  and  their  generals,  by 
the  intrigues  of  statesmen  and  courtiers,  by  national 
passions,  or  by  mere  misunderstandings.  In  reality 
many,  and  very  likely  most,  wars  have  been  brought 
about  by  economic  causes,  have  been  wars  of  competition. 

Since  the  dawn  of  civilisation  tribes  and  nations  have 
contended  for  those  economic  resources  which  at  the 
time  were  most  prized  by  men.  In  primitive,  pastoral 
times  nations  fought  one  another  for  flocks  and  herds, 
for  grazing-grounds  and  drinking-water,  for  fruitful 
valleys  and  slaves,  as  we  may  learn  from  the  Bible  and 
other  ancient  documents.  When  civilisation  progressed, 
they  fought  one  another  for  great  agricultural  resources, 
for  the  possession  of  valleys  and  plains  abundant  in 
grain,  such  as  the  valley  of  the  Nile  and  that  of  the 
Euphrates,  for  the  North  German  plain,  the  Hungarian 
plain,  and  the  plain  of  Lombardy.  Primitive  maritime 
nations  fought  one  another  for  fishing-grounds,  as  did 
the  early  Dutch  and  the  Hanseatic  League.  When 
commerce  progressed,  they  fought  one  another  for  trade 
and  colonies;  for  the  control  of  rivers,  such  as  the  Rhine, 
and  of  harbours,  such  as  Antwerp ;  for  trading  settlements 
and  for  trading  monopolies,  for  the  spice  trade  and  the 
slave  trade,  for  naval  bases  and  for  world-strategical 
positions  whence  the  world’s  trade  may  be  controlled. 
Rome  and  Carthage  made  war  upon  one  another,  not  for 
the  domination  of  the  world,  as  is  generally  believed, 
but,  as  we  may  learn  from  Polybius,  for  the  possession 
of  the  prolific  wheatlands  of  Sicily,  which  both  States 
required  urgently  for  their  clamouring  townsmen  who 
were  dependent  upon  imported  food.  Athens  engaged 


COAL,  IRON— AND  WORLD  DOMINATION  15 


in  her  disastrous  war  with  Syracuse  probably  not  through 
lust  of  domination,  but  in  order  to  provide  the  teeming 
population  of  Attica  with  the  necessary  bread.  The  war 
of  the  Greeks  against  Troy  also  was  probably  waged  for 
economic  reasons.  Ancient  Greece  received  at  one  time 
her  grain  from  the  Black  Sea.  Very  probably  Troy 
controlled  the  Narrows  and  the  grain  trade,  and  the 
Greeks  fought  for  the  freedom  of  that  trade. 

As  the  nations  have  in  the  past  fought  for  bread  and 
fish,  meat  and  spices,  commerce  and  colonies,  it  seems 
only  natural  that  in  the  industrial  era,  in  the  age  of  coal 
and  iron,  States  should  fight  for  the  possession  and  control 
of  those  precious  minerals  which  supply  nations  with 
wealth,  strength,  and  an  abundant  population.  The 
political  and  military  value  of  the  control  of  coal  and 
iron  has  not  yet  been  sufficiently  appreciated  by  the 
statesmen  of  most  nations,  those  of  Germany  excepted. 
Most  diplomatists  and  publicists  still  think  that  the 
principal  aim  of  a  conquering  nation  is  territory  and 
population,  as  if  we  were  still  living  in  the  agricultural 
age.  The  Germans  recognised  at  an  early  date  that 
the  possession  of  an  abundance  of  coal  and  iron  can 
provide  nations  with  wealth  and  power,  railways  and 
ships,  implements  and  arms,  and  a  vast  population ;  that 
coal  and  iron  are  Nature’s  power-house  and  arsenal;  that 
the  lack  of  coal  and  iron  condemns  nations  to  stagnation 
in  population  and  industry,  in  wealth  and  power,  and 
almost  disarms  them.  Germany  fights,  as  will  be  shown 
in  the  following  pages,  largely  for  the  object  of  securing 
for  herself  practically  all  the  coal  and  iron  on  the  Con¬ 
tinent  of  Europe,  and  she  means  to  leave  the  other  nations 
of  Europe  as  far  as  possible  without  coal  and  iron,  so  that 
they  may  be  economically,  and  therefore  militarily  too, 
in  the  power  of  Germany,  who  alone  would  dispose  of 
Nature’s  own  arsenal. 


16  COAL,  IRON— AND  WORLD  DOMINATION 

“  Providence, ”  as  Napoleon  has  told  us,  “  fights  as  a 
rule  on  the  side  of  the  larger  battalions.”  Given  equality 
in  arms,  equipment, organisation,  and  direction,  supremacy 
in  man-power  is  apt  to  be  decisive  in  war.  The  size  of 
armies  depends  on  that  of  the  civil  population  from  which 
they  are  drawn.  Formerly,  when  men  lived  chiefly  by 
agriculture,  ambitious  rulers  strove  to  increase  their 
population  by  seizing  districts  where  an  abundance  of 
food  could  be  grown.  In  the  age  of  coal  and  iron,  agri¬ 
cultural  territories  are  less  important  to  ambitious  States 
for  the  purpose  of  rearing  a  prolific  population.  Nowa¬ 
days  population  increases  not  so  much  in  districts  where 
wheat  is  grown  as  in  those  where  coal  and  iron  are  used. 
The  effect  upon  population  of  the  introduction  of  modern 
manufacturing  based  on  coal  may  be  seen  in  the  case  of 
England  and  Wales  by  the  following  figures : 


Inhabitants  of  England  and  Wales. 


1600 

1700 

1760 

1801 

1841 

1881 

1911 


4,811,718 

6,045,008 

6,479,730 

8,872,980 

16,011,757 

25,974,439 

36,070,492 


During  the  hundred  years  from  1600  to  1700  the 
population  of  England  and  Wales,  which  at  the  time 
lived  chiefly  by  agriculture  and  a  little  commerce  and 
shipping,  grew  only  by  25  per  cent.  During  the  160 
years  from  1600  to  1760,  when  conditions  were  very 
similar,  it  grew  by  only  about  35  per  cent.  The  industrial 
revolution,  the  introduction  of  modern  manufacturing 
by  means  of  machinery  based  upon  coal,  is  usually 
assumed  to  have  begun  about  1760.  During  the  151 
years  which  separate  1760  from  1911,  the  population  of 
England  and  Wales  grew,  not  by  35  per  cent.,  as  it  did 


COAL,  IRON— AND  WORLD  DOMINATION  17 


in  the  160  years  previously,  but  by  455  per  cent.  It 
doubledin  the  forty  years  from  1801  to  1841.  During 
the  110  years  from  1801  to  1911  the  population  of  Eng¬ 
land  and  Wales  has  more  than  quadrupled,  and  it  has 
done  so  almost  exclusively  in  the  manufacturing  and 
commercial  districts,  especially  in  the  former.  The 
agricultural  portions  of  the  country  are  probably  now  less 
populous  than  they  were  in  1801,  partly  because  agricul¬ 
ture  has  been  neglected,  but  chiefly  because  by  the  use 
of  modern  machinery  one  agricultural  labourer  can  now 
do  the  work  of  several  labourers.  While  between  1801 
and  1911  the  population  of  England  and  Wales  has 
grown  fourfold,  that  of  the  principal  manufacturing  and 
trading  towns  has  grown  eight-,  nine-,  tenfold  and  more. 
Between  1801  and  1911  the  population  of  Manchester 
and  Salford  has  increased  from  94,876  to  945,690,  that 
of  Liverpool  from  82,295  to  746,421,  that  of  Birmingham 
from  70,660  to  525,833,  that  of  Leeds  from  53,162  to 
445,550,  that  of  Sheffield  from  45,755  to  454,632,  that  of 
Bradford  from  13,264  to  288,458,  that  of  Nottingham 
from  28,861  to  259,904. 

In  Germany  also  the  vast  increase  of  the  population 
has  taken  place  exclusively  in  the  towns.  Between 
1880  and  1910  Germany’s  agriculture  has  expanded 
mightily.  The  production  of  vegetable  and  of  animal 
food  has  doubled.  Yet,  although  between  1880  and  1910 
Germany’s  population  has  increased  by  19,500,000,  the 
country  population  proper  has  decreased  by  about 
600,000.  The  whole  increase  has  taken  place  in  the 
towns,  and  particularly  in  the  large  and  the  very  large 
towns.  Between  1880  and  1910  the  population  of  Ham¬ 
burg  has  increased  from  289,859  to  931,035,  that  of 
Leipzig  from  149,081  to  589,850,  that  of  Cologne  from 
144,772  to  516,527,  that  of  Frankfort  from  136,819  to 
414,576,  that  of  Dusseldorf  from  95,458  to  358,728,  that 


18  COAL,  IRON— AND  WORLD  DOMINATION 


of  Essen  from  56,944  to  294,663,  that  of  Duisburg  from 
41,242  to  229,483,  that  of  Dortmund  from  66,554  to 
214,226,  that  of  Gelsenkirchen  from  14,615  to  169,513, 
that  of  Bochum  from  33,440  to  136,931.  In  1880  only 
3,273,144  people  lived  in  German  towns  of  100,000 
-  inhabitants  and  more.  In  1910  13,823,348  lived  in  towns 
of  100,000  or  more. 

Even  in  the  United  States  the  population  of  the  towns 
is  rapidly  overtaking  that  of  the  country,  notwith¬ 
standing  the  gigantic  agricultural  area  of  the  Great 
Republic  and  the  vast  progress  effected  by  its  most 
prosperous  rural  industries.  The  United  States,  like 
England  and  Germany,  are  growing  chiefly  in  the  towns, 
owing  to  an  abundant  supply  of  coal  and  iron,  especially 
coal,  while  the  agricultural  population  is  comparatively 
stagnant.  Between  1860  and  1910,  while  the  population 
of  the  United  States  has  grown  from  31,443,321  to 
91,972,266,  or  has  not  quite  trebled,  the  population  of 
New  York  has  increased  from  1,174,779  to  4,766,883, 
that  of  Chicago  from  109,260  to  2,185,283,  that  of  Los 
Angeles  from  4,385  to  319,198,  that  of  St.  Louis  from 
160,773  to  687,029,  that  of  Boston  from  177,840  to 
670,585,  that  of  Cleveland  from  43,417  to  560,663,  that  of 
Buffalo  from  81,129  to  423,715,  that  of  San  Francisco 
from  56,802  to  416,912,  that  of  Pittsburg  from  77,923  to 
533,905,  that  of  Detroit  from  45,619  to  465,766,  that  of 
Indianapolis  from  18,611  to  233,650,  that  of  St.  Paul 
from  10,401  to  214,744,  that  of  Denver  from  4,759  to 
213,381,  etc. 

It  is  significant  that  throughout  the  world  population 
is  densest  on  and  around  the  actively  exploited  coal¬ 
fields. 

In  former  times  men  lived  by  the  work  of  their  hands. 
Now  they  live  by  the  work  of  their  machines.  A  man 
employing  powerful  machinery  can  produce  in  field  and 


COAL,  IRON— AND  WORLD  DOMINATION  19 


factory  as  much  as  a  number  of  men  can  produce  without 
its  help.  Consequently  the  States  in  which  the  employ¬ 
ment  of  machinery  has  been  most  advanced  and  has 
become  most  general  possess  the  most  productive,  the 
most  prosperous,  and  the  most  advanced  citizens,  and 
owing  to  their  great  and  rapidly  increasing  prosperity 
the  inhabitants  have  increased  at  a  very  fast  rate;  while 
in  those  countries  which  lack  machinery,  production, 
wrealth,  and  population  have  increased  extremely  slowly 
and  have  sometimes  become  stagnant.  That  may  be 
seen  by  the  example  of  France,  which  is  very  poor  in  coal. 
As  the  progress  of  nations  in  wealth,  strength,  and  popu¬ 
lation  depends  on  machinery,  which  is  made  chiefly  of 
iron  and  steel  and  which  requires  vast  quantities  of  coal, 
it  follows  that  the  intensive  and  general  use  of  machinery 
is  possible  only  in  countries  in  which  iron  and  coal,  and 
especially  the  latter,  are  abundant. 

It  is  not  generally  realised  that  the  bulk  of  the  coal 
mined  is  used,  not  for  domestic,  but  for  industrial 
purposes.  The  Royal  Commission  on  Coal  Supplies 
gave  some  years  ago  the  following  most  interesting 
estimate  : 


Coal  Consumption  in  United  Kingdom  in  1903. 


Tons. 

For  railways 

•  • 

13,000,000 

For  coasting  steamers  (bunkers) 

•  • 

2,000,000 

For  factories 

•  • 

53,000,000 

For  mines  . . 

•  • 

18,000,000 

For  iron  and  steel  industries 

•  • 

28,000,000 

For  other  metals  and  minerals  . . 

•  • 

1,000,000 

For  brickworks,  potteries,  glassworks,  chemical 

works 

•  • 

5,000,000 

For  gasworks 

•  • 

15,000,000 

For  domestic  purposes 

•  • 

32,000,000 

167,000,000 

20  COAL,  IRON  — AND  WORLD  DOMINATION 


In  the  United  Kingdom  less  than  one-fifth  of  the  coal 
used  in  1903  was  employed  for  domestic  purposes,  and 
with  every  year  industrial  consumption  should  increase 
at  a  more  rapid  rate  than  domestic  consumption,  owing 
to  the  ever-growing  intensification  in  the  use  of  steam- 
power. 

If  we  wish  to  gauge  the  vast  and  ever-growing  impor¬ 
tance  of  coal  for  national  purposes,  and  especially  for 
industrial  and  commercial  requirements,  we  should 
consider  not  merely  the  employment  of  coal  in  a  single 
year  in  a  single  country,  but  should  study  its  progressive 
consumption  throughout  the  world.  From  the  best 
statistics  available  it  appears  that  the  production  of  coal, 
and  therefore  its  consumption  too,  has  increased  as  follows 
in  the  most  important  countries  and  throughout  the 
world : 


Year. 

United 

Kingdom. 

Germany. 

United  States. 

Austria- 

Hungary. 

Tons. 

Tons. 

Tons. 

Tons. 

1865 

99,760,000 

28,330,000 

24,790,000 

2,030,000 

1875 

135,490,000 

48,530,000 

48,200,000 

13,060,000 

1885 

161,960,000 

73,670,000 

112,180,000 

20,430,000 

1895 

193,350,000 

103,960,000 

177,590,000 

27,250,000 

1905 

239,890,000 

173,660,000 

351,120,000 

40,720,000 

1913 

287,410,000 

273,650,000 

504,520,000 

51,580,000 

Y  ear. 

France. 

Russia. 

Belgium. 

Other 

Countries. 

Tons. 

Tons. 

Tons. 

Tons. 

1865 

11,840,000 

330,000 

11,840,000 

3,160,000 

1875 

16,950,000 

1,170,000 

15,010,000 

6,890,000 

1885 

19,510,000 

4,240,000 

17,440,000 

13,390,000 

1895 

28,240,000 

9,100,000 

20,410,000 

20,220,000 

1905 

36,050,000 

17,120,000 

21,840,000 

45,620,000 

1913 

40,190,000 

29,870,000 

22,500,000 

111,280,000 

COAL,  IRON— AND  WORLD  DOMINATION  21 


Year. 
1865  .. 
1875  .. 
1885  .. 
1895  .. 
1905  ... 
1913  .. 


Total  Coal  Production. 

Tons. 


182,080,000 

285,300,000 

412,820,000 

581,120,000 

928,020,000 

1,321,000,000 


In  1865  manufacturing  by  means  of  coal-using  machinery 
was  already  highly  developed.  Between  1865  and  1913, 
within  the  memory  of  many  living  men,  the  consumption 
of  coal  has  increased  from  182,000,000  tons  to  1,321,000,000 
tons,  or  has  grown  more  than  sevenfold. 

The  industrial  progress  of  nations  can  best  be  measured 
by  their  coal  production,  and  especially  by  their  coal 
consumption.  Between  1865  and  1913  coal  production 
has  increased  threefold  in  the  United  Kingdom,  tenfold 
in  Germany,  and  no  less  than  twentyfold  in  the  United 
States.  In  1865  the  United  Kingdom  alone  produced 
55  per  cent,  of  the  world’s  coal.  At  that  time  England 
was  still,  as  Cobden  called  it,  the  workshop  of  the  world. 
In  1913  the  United  Kingdom  produced  only  22  per  cent, 
of  the  world’s  coal.  It  was  no  longer  the  world’s  work¬ 
shop. 

The  vast  progress  of  the  Anglo-Saxon  nations  and  of 
Germany  in  the  manufacturing  industries,  commerce, 
wealth,  strength,  and  population  can  easily  be  explained 
by  their  remarkable  preponderance  in  coal.  In  1913  the 
United  States,  Germany,  and  the  United  Kingdom 
combined  produced  80  J  per  cent,  of  the  world’s  coal,  while 
British  India  and  the  Dominions  produced  53,710,000 
tons  of  coal,  or  4  J  per  cent,  of  the  world’s  output.  During 
the  year  previous  to  the  War,  the  Anglo-Saxon  nations 
and  Germany  combined  raised,  therefore,  85  per  cent, 
of  the  world’s  coal,  and  the  rest  of  the  world  only  15  per 
cent.  In  other  words,  the  Anglo-Saxon  nations  and 

3 


22  COAL,  IRON— AND  WORLD  DOMINATION 


Germany  were  producing  six  times  as  much  coal  as  all 
the  other  nations  of  the  world  together.  They  possessed, 
therefore,  roughly  speaking,  a  similarly  great  prepon¬ 
derance  in  engine-power  and  in  modern  power  of  pro¬ 
duction.  The  supremacy  of  the  Anglo-Saxon  and  German 
-peoples  in  all  the  material  elements  of  life  and  the  rapid 
increase  of  their  population  are  obviously  due  not  so 
much  to  their  genius  as  to  chance,  not  so  much  to  racial 
as  to  mineralogical  causes. 

In  1865  the  United  Kingdom  was  by  far  the  largest 
coal- producer  and  coal-user  in  the  world.  Lately  the 
first  place  has  been  taken  by  the  United  States,  the 
industrial  and  commercial  progress  of  which  has  been 
most  remarkable.  According  to  the  very  full  American 
Government  statistics,  coal  production  in  the  Republic 
has  increased  as  follows: 


Year. 


Tons. 


1814 

1820 

1830 

1840 

1850 

1860 

1870 

1880 

1880 

1900 

1910 

1913 


20 

3,080 

285,779 

1,848,249 

0,266,233 

13,044,680 

29,496,054 

63,822,830 

140,866,931 

240,789,310 

447,853,909 

504,520,000 


Not  unnaturally  America’s  industries,  wealth,  strength, 
and  population  also  have  increased  at  an  extraordinarily 
rapid  rate  in  accordance  with  the  increase  of  the  national 
coal  consumption. 

Coal  production  depends  mainly  upon  two  factors: 
upon  the  quantity  and  quality  of  coal  contained  in  the 
soil,  and  upon  the  greater  or  lesser  facility  with  which 


COAL,  IRON— AND  WORLD  DOMINATION  23 


the  coalfields  can  be  exploited.  Coal  strata  which  lie 
at  a  very  great  depth,  or  which  are  exceedingly  thin  and 
full  of  vaults  through  geological  disturbance,  or  which 
are  liable  to  be  flooded  owing  to  the  nature  of  the  surround¬ 
ing  soil,  are,  of  course,  less  valuable  than  deposits  in 
which  the  coal  occurs  in  thick  and  easily  workable  layers 
close  to  the  surface. 

As  it  would  lead  too  far  to  compare  the  coal  deposits 
possessed  by  the  different  nations  with  regard  to  the 
quality  of  the  coal  and  the  greater  or  lesser  facility  of 
exploiting  them,  we  must  be  content  to  disregard  these 
important  but  highly  technical  factors,  and  to  compare 
summarily  the  stores  of  coal  possessed  by  the  nations  of 
the  world.  The  most  authoritative  and  most  recent 
inventory  of  the  world’s  riches  in  coal  is  contained  in  the 
magnificent  three-volume  monograph  Coal  Resources  of 
the  World ,  which  was  placed  before  the  International 
Geological  Congress  held  in  Canada  in  1913.  I  have 
extracted  from  it  the  following  figures : 


The  World’s  Coal 


In  Europe 
In  North  America 
In  South  America 
In  Asia 
In  Africa 

In  Australia  and  Oceania 


Resources. 

Tons. 

784,190,000,000 
. .  5,073,426,000,000 

32,102,000,000 
. .  1,279,586,000,000 

57,839,000,000 
170,410,000,000 


7,397,553,000,000 


Total  . . 


It  will  be  noticed  that  North  America  possesses,  accord¬ 
ing  to  the  present  state  of  geological  knowledge,  two- 
thirds  of  the  coal  of  the  world.  South  America,  Australia, 
and  Africa,  the  soil  of  which,  however,  has  not  yet  been 
sufficiently  explored,  contain,  apparently,  only  little  coal. 
Second  in  importance  to  the  North  American  coal- 
measures  are  the  coalfields  of  Asia.  The  richest  coal 


24  COAL,  IRON— AND  WORLD  DOMINATION 


deposits  on  the  Asiatic  continent  occur  in  China.  The 
province  of  Shansi,  near  Kiau  Chau,  is  particularly  rich 
not  only  in  excellent  coal,  but  in  iron  ore  as  well.  Ger¬ 
many  seized  Kiau  Chau  not  in  order  to  compete  with 
Hongkong- — trade  is  a  very  unimportant  source  of 
national  wealth  and  strength  if  compared  with  produc¬ 
tion — but  in  order  to  control  and  exploit  some  of  the 
largest  and  most  valuable  coal  and  iron  deposits  in  the 
world  with  the  help  of  cheap  Chinese  labour.  An  iron- 
and  coal-producing  India  would  obviously  be  infinitely 
more  valuable  than  an  India  producing  rice  and  millet, 
cattle  and  cotton. 

The  European  coalfields  rank  third  in  importance. 
They  are  inferior  to  those  of  Asia,  and  they  are  unimpor¬ 
tant  if  compared  with  the  gigantic  deposits  of  North 
America.  If  coal  should  continue  to  be  the  principal 
source  of  mechanical  power- — and  there  is  at  present  no 
indication  that  it  will  be  superseded  by  electricity  or  the 
force  derivable  from  the  tides  and  the  sun’s  rays- — North 
America  is  likely  to  become  not  only  the  world’s  principal 
seat  of  the  manufacturing  industries  and  of  wealth,  but 
the  world’s  principal  centre  of  population  and  of  military 
power  as  well.  In  a  century  or  two  Europe  may  occupy 
a  secondary  position  in  the  world  owing  to  its  relative 
poverty  in  coal. 

Now  let  us  study  in  greater  detail  the  distribution  of 
coal  among  the  various  nations : 


Coal  Resources  of  Europe. 


Tons. 


Germany 

Great  Britain  and  Ireland 
Russia 

Austria-Hungary 

France 

Belgium 

Spain . 


423,356,000,000 

189,535,000,000 

60,106,000,000 

59,269,000,000 

17,583,000,000 

11,000,000,000 

8,768,000,000 


COAL,  IRON— AND  WORLD  DOMINATION  25 


Spitzbergen 
Holland 
Balkan  States 

Italy*  ,,  ..  . .  ..  .. 

Sweden,  Denmark,  and  Portugal  . . 


Tons. 

8,750,000,000 

4,402,000,000 

996,000,000 

243,000,000 

184,000,000 


Total 

Coal  Resources  of 

United  States 

Canada 

Newfoundland 

Total 


784,192,000,000 

North  America. 

. .  3,838,657,000,000 

. .  1,234,269,000,000 

500,000,000 


. .  5,073,426,000,000 


Coal  Resources  of  South 

Columbia 
Chili  . . 

Peru  . . 

Argentine 

Venezuela 

Honduras 

Total 


and  Central  America. 

27,000,000,000 

3,048,000,000 

2,039,000,000 

5,000,000 

3,000,000 

5,000,000 


32,102,000,000 


Coal  Resources  of  Asia. 


China  . . 
Siberia 
India  . . 
Indo-China 
Japan  . . 
Persia  . . 
Manchuria 
Korea  . . 

Total 


995,587,000,000 

173,879,000,000 

79,001,000,000 

20,002,000,000 

7,970,000,000 

1,858,000,000 

1,208,000,000 

81,000,000 


1,279,586,000,000 


Coal  Resources  of  Africa. 


Transvaal 

Rest  of  South  Africa 
Belgian  Congo 
Rhodesia 
Southern  Nigeria 


36,000,000,000 

20,200,000,000 

990,000,000 

569,000,000 

80,000,000 


Total 


«  • 


57,839,000,000 


26  COAL,  IRON  — AND  WORLD  DOMINATION 


Coal  Resources  of  Australia  and  Oceania. 


New  South  Wales 
Victoria 
Queensland  . . 

New  Zealand  . . 
Netherlands  India 
Western  Australia 
British  North  Borneo 
Tasmania 
Philippines 


Tons. 

118,439,000,000 

31,166,000,000 

15,218,000,000 

3,386,000,000 

1,311,000,000 

653,000,000 

75,000,000 

66,000,000 

66,000,000 


Total 


170,380,000,000 


In  addition  to  the  coalfields  enumerated,  there  is  a 
large  one  in  the  Antarctic. 

At  the  present  rate  of  consumption  the  known  coal- 
supply  should  suffice  for  about  seven  thousand  years. 

The  detailed  statistics  given  show  that  the  United 
States  alone  possess  more  than  one-half  of  the  world’s 
coal,  that  their  store  is  nearly  five  times  as  large  as  that 
of  the  whole  of  Europe,  and  twenty  times  as  large  as  that 
of  the  United  Kingdom.  Providence  has  endowed  the 
Great  Republic  with  a  super-abundance  of  power.  The 
vastness  of  the  coal  resources  of  the  United  States  may 
be  gauged  from  the  fact  that  the  workable  coalfields  cover 
496,776  square  miles,  an  area  which  is  more  than  four 
times  as  large  as  the  whole  of  the  United  Kingdom.  The 
State  of  Pennsylvania  alone  produces  at  present  more 
coal  than  the  entire  United  Kingdom. 

Nature  has  been  extraordinarily  kind  to  some  nations 
and  exceedingly  niggardly  to  others.  The  coal  resources 
of  some  great  nations,  such  as  France,  Italy,  and  Japan, 
are  quite  insignificant.  At  their  present  rate  of  consump¬ 
tion,  the  United  States  would  exhaust  the  coal  of  all 
France  in  about  thirty  years,  and  that  of  all  Italy  in  about 
five  months.  France  has  not  only  very  little  coal,  but 
her  coal  strata  are  dispersed  throughout  the  country. 


COAL,  IRON — AND  WORLD  DOMINATION  27 


In  addition  the  seams  run  often  at  steep  angles.  They 
are,  as  a  rule,  very  thin  and  expensive  to  work,  and  they 
are  full  of  faults  and  quite  erratic.  The  industrial  back¬ 
wardness  of  France  and  Italy  is  due  not  so  much  to  lack 
of  enterprise  as  to  lack  of  coal.  The  scarcity  of  coal  is 
at  the  same  time  limiting  the  population  of  these  two 
countries,  for  the  expansion  of  population  depends  on 
the  means  of  subsistence,  and  among  these  coal  stands 
foremost.  Coal  regulates  the  life  and  progress  of  modern 
nations.  The  poverty  of  Ireland,  its  dissatisfaction,  and 
industrial  backwardness,  is  largely  due  not  to  political 
reasons,  but  to  lack  of  coal. 

According  to  the  figures  supplied  above,  Germany 
possessed  before  the  War  55  per  cent,  of  the  coal  of  all 
Europe,  and  more  than  70  per  cent,  of  the  coal  of  the 
European  Continent.  Fully  realising  that  coal  and  iron 
are  nowadays  as  important  as  land  was  in  the  agricultural 
era,  that  coal  and  iron  can  readily  be  converted  into 
industry,  commerce,  wealth,  population,  and  military 
power,  Germany  has  seized  the  coalfields  of  Belgium,  the 
richest  coalfields  of  France,  which  lie  near  the  Belgian 
frontier,  and  the  great  coalfields  of  Poland  and  of  Western 
Russia  as  well,  and  she  intends  to  retain  them  if  possible. 
She  means  to  control  Nature’s  power-house  and  arsenal. 
She  has,  in  the  course  of  the  War,  acquired  a  veritable 
coal  monopoly  on  the  Continent,  for  the  only  othet 
Continental  State  which  possesses  a  large  amount  of  coal 
is  Austria-Hungary,  her  ally.  Germany  has  claimed 
Spitzbergen,  which  hitherto  has  been  considered  No- 
Man’s-Land,  because  it  contains  almost  as  much  coal  as 
Belgium,  and  she  has  been  endeavouring  to  monopolise 
the  mineral  resources  of  Spain,  which,  in  addition  to  iron 
and  copper,  has  an  important  store  of  coal.  Germany 
controls  at  present  about  75  per  cent,  of  the  coal  of 
Europe  and  about  95  per  cent,  of  the  coal  of  the  Continent. 


28  COAL,  IKON— AND  WORLD  DOMINATION 


She  controls,  therefore,  the  principal  source  of  modern 
industrial,  commercial,  financial,  and  military  power. 

Before  the  War  Germany  had  considerably  more  than 
twice  as  much  coal  as  the  whole  of  the  United  Kingdom. 
_The  Rhenish-Westphalian  coalfield  alone,  upon  and  around 
which  are  situated  the  towns  of  Diisseldorf,  Essen, 
Duisburg,  Dortmund,  Elberfeld,  Gelsenkirchen,  Barmen, 
Bochum,  Miilheim  an  der  Ruhr,  Crefeld,  Hamborn, 
Solingen,  Remscheid,  contains  213,566,000,000  tons  of 
coal,  or  considerably  more  than  the  whole  of  the  United 
Kingdom.  Hence  the  greatest  centre  of  population  in 
Germany  is  to  be  found  on  and  around  these  coal-pits, 
which  are  largely  responsible  for  Germany’s  marvellous 
progress  in  industry,  commerce,  wealth,  population,  and 
military  strength. 

Coal  is  of  infinite  value  to  the  nations,  not  only  because 
it  is  convertible  into  industrial,  military,  and  political 
power,  but  also  because  modern  science  has  succeeded  in 
extracting  from  it  some  of  the  most  precious  and  most 
necessary  commodities,  such  as  gas,  tar,  pitch,  oil,  benzol, 
naphthaline,  creosote,  ammonia,  carbolic  acid,  toluol, 
more  than  a  thousand  dyes,  fertilisers,  disinfectants, 
explosives,  and  some  of  the  most  valuable  drugs,  such 
as  saccharin,  aspirin,  phenacetin,  antipyrin,  and  dozens 
of  others. 

In  former  centuries  civilisation  was  based  upon  wood- 
fuel  and  timber.  The  present  age  is  the  age  of  coal  and 
iron.  Modern  machinery,  modern  implements,  and  modern 
means  of  locomotion  and  transport  by  land  and  sea  are 
made  of  steel.  The  expansion  in  the  production  of  iron 
has  been  as  marvellous  and  as  rapid  as  that  of  coal.  The 
best  and  most  modern  survey  of  the  iron  stores  of  the 
world  is  contained  in  a  large  work,  The  Iron  Resources  of 
the  World,  which  was  placed  before  the  International 
Geological  Congress  at  Stockholm  in  1910.  I  have 


COAL,  IRON  — AND  WORLD  DOMINATION  29 


extracted  from  it  some  of  the  figures  given  in  these  pages. 
Until  recently  iron  was  virtually  one  of  the  rare  metals 
Only  lately  has  its  use  become  general.  That  may  be 
seen  from  the  following  figures: 

World’s  Production  of  Pig  Iron. 

Tons. 

800,000 
4,800,000 
...  12,900,000 

. .  26,200,000 

. .  66,000,000 

Iron  is  no  longer  smelted  with  wood.  About  three 
tons  of  coal  are  required  to  smelt  a  ton  of  iron.  The 
transport  of  large  quantities  of  minerals  is  very  expensive. 
Nations  rich  in  coal  or  in  iron,  or  in  both,  are  reluctant  to 
sell  these  precious  raw  materials  to  their  competitors. 
It  follows  that  only  those  nations  can  develop  a  large 
iron  industry  which  are  rich  in  coal  and  iron,  or  which 
are  fortunate  enough  to  be  able  to  obtain  one  of  these 
minerals,  or  both,  easily  and  cheaply  from  abroad.  The 
principal  iron  industries  of  the  world  are  based  mainly 
upon  the  exploitation  of  native  coal  and  iron  ore.  The 
iron-ore  deposits  of  the  world  are,  according  to  the 
Geological  Report  of  1910,  distributed  as  follows  over 
the  five  continents: 


XU  X  Uv V  • 

In  1850  . 
In  1871  . 
In  1891  . 
In  1910  . 


Resources  of  Metallic  Iron  contained  in  Iron  Ore. 


Europe 
America 
Asia  . . 
Africa 
Australia 


Actual  Reserves.  Potential  Reserves. 


Tons. 

.  4,733,000,000 

.  5,154,000,000 

156,000,000 
75,000,000 
74,000,000 


Tons. 

12,085,000,000  +  Considerable 
40,731,000,000  +  Enormous 
283,000,000  +  Enormous 
Many  thousands  +  Enormous 
37,000,000  +  Considerable 


10,192,000,000 


53,136,000,000+  Enormous 


30  COAL,  IRON— AND  WORLD  DOMINATION 


It  will  be  noticed  that  for  some  inscrutable  reason 
Providence  has  given  to  America  not  only  the  bulk  of  the 
world’s  coal,  but  also  the  bulk  of  the  world’s  iron. 

Let  us  now  consider  how  the  different  nations  share  the 
iron  resources  of  the  world. 

RESOURCES  OF  METALLIC  IRON  CONTAINED  IN  IRON  ORE. 


Iron  Resources  of  Europe. 


Actual  Reserves. 

Potential  Reserves 

Tons. 

Tons. 

Germany . . 

. .  1,270,000,000 

Considerable 

France  . . 

..  1,140,000,000 

Considerable 

Sweden  . . 

740,000,000 

105,000,000 

United  Kingdom 

455,000,000 

10,830,000,000 

Russia 

387,200,000 

424,700,000 

Spain 

349,000,000 

Considerable 

Norway  . . 

124,000,000 

525,000,000 

Austria  . . 

90,400,000 

97,000,000 

Luxemburg 

90,000,000 

T 

Greece 

45,000,000 

? 

Belgium  . . 

25,000,000 

n 

Hungary  .  . 

13,100,000 

34,100,000 

Italy 

3,300,000 

1,000,000 

Finland  . . 

? 

16,000,000 

Bosnia  and  Herzegovina  ? 

11,300,000 

Bulgaria  . . 

f 

700,000 

Switzerland 

800,000 

800,000 

Portugal  . . 

t 

39,000,000 

Total 

.  .  4,732,800,000 

12,084,600,000 

Iron  Resources  of  America. 


Actual  Reserves .  Potential  Reserves. 


United  States 
Newfoundland 
West  Indies 
Canada 
Mexico 

Columbia,  Vene¬ 
zuela,  Bolivia, 
Peru,  Chili 
Brazil 


Tons. 

2,304,600,000 

1,961,000,000 

856,800,000 

Considerable 

30,000,000 


2,000,000 

n 


5,154,400,000 


Tons. 

37,222,000,000 
Enormous 
454,000,000 
Probably  enormous 
Probably  considerable 

Considerable 

3,055,000,000 


Total 


40,731,000,000  +  Enormoua 


COAL,  IRON— AND  WORLD  DOMINATION  31 


British  India 
China 

J apan  . . 
Korea 
Philippines 
Asiatic  Russia 
Persia 


Total 


Iron  Resources  of  Asia. 


Actual  Reserves.  Potential  Reserves. 


Tons. 

65,000,000 

60,000,000 

28,000,000 

2,000,000 

500,000 

? 

* 


Tons. 

250,000,000  +  Considerable 
Probably  enormous 
Moderate 

Probably  moderate 
! 

14,800,000 

18,000,000 


155,500,000 


282,800,000  +  Enormous 


Iron  Resources  of  Africa. 


Algiers  and  Tunis 
Rest  of  Africa 

Total 


Actual  Reserves. 
Tons. 
75,000,000 


73,000,000 


Potential  Reserves. 

Tons. 

? 

Enormous 

Enormous 


Iron  Resources  of  Australia  and  Oceania. 


New  South  Wales 
Western  Australia 
South  Australia  . 
Queensland 
Victoria  . . 
Tasmania  . . 

New  Zealand 


Actual  Reserves. 
Tons. 

26,800,000 


15,000,000 

32,000,000 


Potential  Reserves. 

Tons. 

1,700,000 

15,000,000  +  Considerable 
12,300,000 
7,000,000 
Moderate 
1,000,000 

100,000  +  Considerable 


Total 


73,800,000  37,100,000  +  Considerable 


According  to  the  present  state  of  geological  knowledge, 
Nature  has  given  to  the  United  States  not  only  the  world’s 
greatest  coalfields,  but  also  the  world’s  greatest  iron- 
mines.  While  their  store  of  coal  is  nearly  five  times  as 
great  as  that  of  all  Europe,  their  store  of  iron  is  almost 
exactly  three  times  as  great  as  that  of  all  Europe. 

Modern  civilisation  is  based  upon  the  use  of  coal  and 


32  COAL,  IRON  — AND  WORLD  DOMINATION 


iron.  Since  1865  the  production  of  iron  has  grown  as 
follows  in  the  principal  countries: 


Year. 

United 

Kingdom. 

Germany. 

United 

States. 

Austria- 

Hungary. 

Tons. 

Tons. 

Tons. 

Tons. 

1865 

4,896,000 

975,000 

845,000 

292,000 

1875 

6,432,000 

2,029,000 

2,056,000 

463,000 

1885 

7,369,000 

3,687,000 

4,111,000 

715,000 

1895 

7,827,000 

5,465,000 

9,597,000 

1,128,000 

1905 

9,746,000 

10,988,000 

23,360,000 

1,372,000 

1910 

10,380,000 

14,793,000 

27,740,000 

2,010,000 

Year. 

France. 

Bussia. 

Belgium. 

Other 

Countries. 

Tons. 

Tons. 

Tons. 

Tons. 

1865 

1,290,000 

299,000 

471,000 

413,000 

1875 

1,416,000 

427,000 

540,000 

557,000 

1885 

1,630,000 

538,000 

713,000 

1,039,000 

1895 

2,005,000 

1,453,000 

829,000 

1,083,000 

1905 

3,077,000 

2,125,000 

1,310,000 

2,075,000 

1910 

4,001,000 

3,040,000 

1,804,000 

2,553,000 

Total  Iron  Production. 


Year. 

Tons. 

1865 

•  • 

.  9,481,000 

1875 

•  • 

.  13,920,000 

1885 

•  • 

.  19,792,000 

1895 

•  • 

.  29,387,000 

1905 

•  • 

.  54,053,000 

1910 

•  • 

.  66,321,000 

Between 

1865 

and 

1910  the  production  of  iron 

increased  from  9,481,000  tons  to  66,321,000  tons,  or  almost 
exactly  sevenfold.  It  is  significant  that  the  production 
of  iron  has  expanded  at  almost  the  identical  ratio  as  the 
production  of  coal.  In  1865  the  United  Kingdom  pro¬ 
duced  55  per  cent,  of  the  world’s  coal  and  52  per  cent,  of 


COAL,  IRON— AND  WORLD  DOMINATION  33 


the  world’s  iron.  In  1910  it  produced  only  22  per  cent, 
of  the  world’s  coal  and  only  15J  per  cent,  of  the  world’s 
iron.  Between  1865  and  1910  iron  production  has 
doubled  in  the  United  Kingdom,  and  has  grown  fifteen¬ 
fold  in  Germany  and  no  less  than  thirty-threefold  in  the 
United  States. 

Nature  has  given  to  the  Anglo-Saxon  nations  and  to 
the  German  nation  a  vast  preponderance  in  both  coal 
and  iron.  Of  the  66,321,000  tons  of  iron  produced 
throughout  the  world  in  1910,  52,913,000  tons,  or  80  per 
cent.,  were  made  by  the  United  Kingdom,  Germany,  and 
the  United  States  combined.  The  Anglo-Saxon  nations 
and  Germany  owe  their  pre-eminence  in  industry,  com¬ 
merce,  wealth,  and  power  to  accident,  to  the  fact  that 
Providence  has  given  them  vast  stores  of  coal  and  iron, 
which  are  the  twin  bases  of  modern  industry,  modern 
wealth,  and  modern  power. 

The  detailed  tables  given  in  these  pages  show  that 
among  the  nations  of  Europe  Germany  is  foremost  not 
only  in  coal,  but  also  in  iron.  She  possessed  before  the 
War  10  per  cent,  more  than  France  and  about  three  times 
as  much  iron  as  the  United  Kingdom.  She  had  about 
25  per  cent,  of  the  iron  of  all  Europe  and  about  30  per 
cent,  of  the  iron  existing  on  the  European  Continent. 
Italy  is  as  poor  in  iron  ore  as  she  is  in  coal.  Her  total 
supply  would  be  exhausted  by  the  United  States  in  a  few 
months. 

The  vastness  of  the  French  iron  deposits  was  discovered 
only  a  few  years  ago.  Hitherto  France  could  smelt  only 
a  small  portion  of  her  iron  ore,  as  she  lacks  the  necessary 
coal.  Unfortunately  for  France,  not  only  her  greatest 
coal  deposits,  but  her  greatest  iron  deposits  as  well  lie 
very  near  her  eastern  frontier.  Her  principal  iron-mines 
are  situated  about  the  town  of  Briey,  close  to  the  fortress 
of  Metz.  Germany  seized  during  the  first  weeks  of  the 


34  COAL,  IRON  —AND  WORLD  DOMINATION 


War  not  only  France’s  principal  coalfields,  but  the  bulk 
of  France’s  iron  ore  as  well.  Her  Lorraine  iron-mines 
contain  91  per  cent,  of  her  iron  ore.  In  the  districts 
occupied  by  the  German  troops  France  produced  before 
-the  War  68’8  per  cent,  of  her  coal,  78-3  per  cent,  of  her 
coke,  and  90  per  cent,  of  her  iron  ore.  The  seriousness 
of  that  blow  to  her  can  scarcely  be  overstated. 

Germany  has  seized  the  iron  ore  of  Luxemburg  and 
of  Belgium.  Furthermore,  she  has  seized  the  iron-ore 
deposits  in  Poland  and  in  Western  Russia,  and  she  does 
not  intend  to  abandon  any  of  her  precious  conquests. 
Lastly,  she  has  monopolised  the  iron  ore  exported  from 
Sweden,  and  has  endeavoured  to  control  the  iron-ore 
trade  of  Spain.  Thus  she  has  obtained  approximately 
as  great  a  monopoly  of  iron  ore  on  the  Continent  as  she 
has  of  coal.  It  is  worth  noting  that  the  United  Kingdom 
possesses  only  one-fourth  of  Europe’s  coal,  and,  as  far  as 
her  actual  reserves  are  concerned,  less  than  one-tenth  of 
Europe’s  iron.  Germany  has  seized  Europe’s  power¬ 
house  and  arsenal,  and  she  does  not  intend  to  relinquish 
them  unless  compelled.  At  the  present  moment  Ger¬ 
many  absolutely  dominates  Europe  with  the  coal  and  iron 
under  her  possession  and  control. 

Germany’s  statesmen  and  Generals  have  obviously 
recognised  the  immense  present,  and  the  still  greater 
prospective,  value  of  controlling  the  bulk  of  Europe’s 
coal  and  iron.  They  have  recognised  that  coal  and  iron 
are  the  sinews  of  war  and  of  peace.  They  have  recognised 
that  coal  and  iron  are  indispensable  in  modern  economic 
life  and  modern  warfare;  that  they  are  the  principal 
sources  of  wealth,  power,  and  population;  that  nations 
which  lack  coal  and  iron  are  bound  to  remain  poor  and 
industrially  backward ;  that  the  population  of  the  latter 
is  bound  to  remain  stagnant;  that  they  are  bound  to 
become  tributaries  to  the  nations  which  possess  an  abun¬ 
dance  of  these  invaluable  and  irreplaceable  minerals ;  that 


COAL,  IRON— AND  WORLD  DOMINATION  35 


nations  lacking  coal  and  iron  are  practically  disarmed  and 
must  remain  militarily  helpless. 

On  May  20,  1915,  the  six  greatest  associations  of 
German  business  men  presented  to  the  Imperial  Chan¬ 
cellor  a  petition  in  which  it  was  stated : 

...  By  acquiring  the  line  of  the  Meuse  and  the  French 
coast  of  the  Channel,  Germany  would  obtain  not  only  the 
ore  deposits  of  Briey,  which  have  already  been  mentioned, 
but  also  the  coal  districts  of  the  Department  du  Nord  and 
of  the  Department  Pas  de  Calais.  .  .  . 

Our  demands,  which  at  first  sight,  seem  to  be  dictated 
by  purely  economic  motives,  must  be  considered  from  a 
larger  point  of  view.  They  spring  from  the  necessity  of 
increasing  Germany’s  national  and  military  power  to  the 
utmost.  Our  demands  must  therefore  be  considered 
from  the  military  point  of  view.  This  is  particularly  the 
case  with  regard  to  the  acquisition  of  agricultural  terri¬ 
tory,  upon  which  stress  has  been  laid  in  the  present 
petition,  and  with  regard  to  the  seizure  of  the  ore-bearing 
territories  of  the  Meurthe  and  Moselle,  and  of  the  French 
coal  districts  of  the  Departments  du  Nord  and  Pas  de 
Calais,  and  the  Belgian  coal  districts.  .  .  . 

Acquisitions  in  the  ore  and  iron  districts  mentioned  are 
required  not  only  by  ou  reconomic  interests,  but  also  by 
military  necessity.  .  .  . 

The  possession  of  vast  supplies  of  coal,  and  particularly 
of  coal  rich  in  bitumen,  such  as  that  which  is  found  in 
Northern  France,  is  at  least  as  decisive  for  the  issue  of 
the  War  as  is  the  possession  of  iron  ore.  Belgium  and 
Northern  France  together  produce  more  than  40,000,000 
tons  of  coal  per  annum.  Besides,  coal  is  nowadays  one 
of  the  determining  political  factors.  .  .  . 

It  is  generally  known  that  our  most  important  ex¬ 
plosives  are  derived  from  coal,  their  constituents  being 
obtained  during  the  coking  process,  and  that  coal  is 
important  also  for  the  production  of  ammonia.  Coal 
can  provide  us  with  benzol,  the  only  product  with  which 
we  can  replace  the  benzine  which  we  lack.  Lastly,  coal 
furnishes  us  with  tar,  which  can  be  converted  into  oil- 
fuel,  which  is  indispensable  for  naval  purposes,  and  into 
lubricants.  .  .  . 


36  COAL,  IRON— AND  WORLD  DOMINATION 


In  summing  up,  we  would  say  that  the  War  aims 
indicated  will  secure  permanently  Germany’s  national 
economy,  and  at  the  same  time  guarantee  her  military 
strength  and  her  political  independence  and  power.  In 
addition,  they  will  expand  Germany’s  economic  oppor- 
_  tunities.  They  will  provide  work  for  the  workers,  and 
will  therefore  be  of  advantage  to  labour  as  a  whole. 

Professor  Schumacher,  an  eminent  economist,  stated 
in  a  lecture  delivered  on  June  20,  1915: 

The  whole  western  frontier  of  Germany  from  south  to 
north  must  be  improved  as  far  as  circumstances  permit. 
It  is  no  less  important  to  provide  for  the  German  War 
industries  upon  which  successful  warfare  must  be  based. 

.  .  .  Before  all  we  must  secure  for  Germany  the  posses¬ 
sion  of  the  raw  materials  necessary  for  our  War  industries, 
and  at  the  same  time  deprive  our  enemies  of  the  possession 
of  these. 

The  iron  deposits  are  most  important.  Without  the 
minette  ore  of  Lorraine  we  cannot  maintain  our  iron  and 
steel  production  on  a  scale  sufficiently  large  for  the  con¬ 
duct  of  the  War.  Happily,  we  can  boast  of  the  possession 
of  the  largest  iron  deposits  in  Europe.  These  we  have 
obtained  in  consequence  of  the  victorious  war  of  1 870-1871. 
The  Peace  of  Frankfort  was  to  give  Germany  the  entire 
iron-ore  deposits  of  Lorraine.  We  did  not  succeed  in 
getting  them  because  the  geologists  whom  Bismarck  con¬ 
sulted  at  the  time  when  the  frontier  was  delimited  made 
a  mistake.  Since  the  eighties  we  know  that  the  larger 
portion  of  the  ore  deposits  of  the  plateau  of  Briey  has  been 
left  to  France,  though  Bismarck  imagined  that  the  bulk 
of  the  iron  ore  had  been  obtained  by  Germany.  To-day 
we  can  rectify  that  serious  error  because,  happily,  Ger¬ 
many  seized  the  French  ore  district  at  the  beginning  of 
the  War,  and  is  holding  it  firmly  in  her  grasp. 

Second  in  importance  for  Germany’s  War  industries 
is  coal,  especially  that  kind  of  coal  which  can  readily 
be  converted  into  coke  and  which  yields  the  principal 
explosives.  We  could  not  continue  the  War  successfully 
if  we  did  not  obtain  the  necessary  supply  of  iron  ore  from 
the  soil  of  Lorraine,  and  we  could  also  not  hope  to  succeed 
had  not  Nature  endowed  Germany,  and  particularly  the 


COAL,  IRON —AND  WORLD  DOMINATION  37 


Rhenish  Province  and  Westphalia,  and  the  neighbouring 
districts  of  Belgium  and  of  Northern  France,  with  excellent 
coking  coal.  Similar  quantities  of  that  precious  raw  material 
do  not  occur  elsewhere  in  Europe,  and  their  quality  is  of 
the  best.  Now,  when  we  have  learned  how  important  the 
question  of  munitions  is  for  the  issue  of  the  War,  and  when 
we  are  already  compelled  to  employ  Belgian  coal  for 
Germany’s  own  requirements,  we  must  declare  that  the 
vital  needs  of  the  German  nation  in  war  and  in  peace 
make  it  impossible  to  render  up  once  more  to  the  enemy 
these  mainsprings  of  military  and  economic  power. 

In  Germany  science  and  industry,  commerce  and  the 
army  have  worked  hand  in  hand.  The  German  states¬ 
men,  the  German  Generals,  and  the  German  people  have 
become  convinced  that  in  the  modern  world  not  cotton 
but  coal  is  king,  and  that  coal  shares  his  rule  with  iron; 
that  the  nation  which  dominates  the  coal  and  iron 
resources  of  Europe  dominates  Europe  itself  industrially, 
commercially,  financially,  and  militarily.  The  German 
conception  is  no  doubt  correct,  and  it  is  worth  bearing 
in  mind  that  at  present,  and  for  decades  to  come,  the 
domination  of  Europe  is  equivalent  to  the  domination 
of  the  world.  Germany,  if  victorious,  may  dominate  the 
world,  not  so  much  owing  to  her  vast  territorial  acquisitions 
in  the  East  and  the  West  as  owing  to  her  acquisition  of 
a  monopoly  of  coal  and  iron  on  the  Continent  of  Europe. 
The  coal  and  iron  problem  is  very  likely  far  more  impor¬ 
tant  than  most  political  problems,  such  as  the  fate  of 
Constantinople  and  the  problem  of  nationalities.  Un¬ 
fortunately,  most  statesmen  and  diplomats  live  in  the  past. 
They  talk  of  territories  and  strategical  points  and  har¬ 
bours  and  racial  questions  as  if  we  were  still  living  in 
the  eighteenth  century.  Unfortunately,  most  statesmen 
and  diplomats,  and  most  publicists  as  well,  have  not  yet. 
recognised  that  he  who  dominates  the  coal  and  iron 
industries  dominates  the  world. 


4 


CHAPTER  III 


BRITAIN’S  TRUE  WEALTH  AND  THE  RELATIVE 
UNIMPORTANCE  OF  THE  WAR  DEBT  * 

According  to  Mr.  Bonar  Law’s  Budget  forecast,  the 
British  National  Debt  will  amount  to  £7,980,000,000  at 
the  end  of  the  financial  year,  on  March  31,  1919.  The 
British  War  expenditure  has  constantly  been  rising.  It 
amounts  at  present  to  approximately  £2,000,000,000  per 
year,  and  may  continue  increasing.  In  order  to  finance 
the  War  a  large  portion  of  Britain’s  foreign  investments 
had  to  be  sold  and  vast  sums  of  money  had  to  be  borrowed 
from  the  United  States.  The  struggle  may  last  another 
year  or  longer.  The  after- War  settlement  is  bound  to  be 
exceedingly  costly.  Ultimately  the  British  War  debt 
may  approximate,  or  may  even  exceed,  what  is  generally 
called  the  national  wealth.  Before  the  war  it  was 
estimated  that  Britain’s  national  wealth  came  to  about 
£15,000,000,000.  Not  unnaturally  many  are  alarmed  at 
the  gigantic  and  rapidly  growing  amount  of  the  British 
indebtedness.  Some  pessimists  believe  that  in  the  end 
England  will  be  utterly  ruined,  that  Britain  must  make 
peace  promptly  to  avoid  national  bankruptcy  and  financial 
annihilation,  that  in  any  case  Great  Britain  will  be  greatly 
impoverished,  and  that  she  will  become  financially  a 
tributary  to  the  United  States.  It  has  been  asserted 
that  Lord  Lansdowne’s  unfortunate  letter  was  inspired 
by  these  considerations.  In  the  following  pages  an 

*  From  The  Nineteenth  Century  and  After ,  May,  1918. 

38 


BRITAIN’S  WEALTH  AND  THE  WAR  DEBT  39 


attempt  will  be  made  to  survey  the  position  in  all  its 
bearings. 

Those  who  tell  us  that  Great  Britain’s  national  wealth 
amounts  to  £15,000,000,000,  that  before  long  the  National 
Debt  will  be  greater  than  the  entire  wealth  of  the  country, 
suffer  from  a  confusion  of  thought.  They  confuse 
national  wealth  and  individual  wealth,  which  is  a  totally 
different  thing.  Man’s  span  of  life  is  short.  A  nation’s 
life  is  long  and  it  may  last  for  ever.  One  cannot,  there¬ 
fore,  ascertain  the  true  wealth  of  a  nation  by  adding  up 
the  property  of  all  the  short-lived  citizens  of  the  present. 
The  wealth  of  a  nation  is  not  fixed.  It  is  not  stationary. 
On  the  contrary,  it  is  subject  to  growrth  and  decline  as  is 
the  nation  itself.  It  is  therefore  susceptible  of  indefinite 
expansion  or  to  equally  indefinite  contraction.  Whether 
the  wealth  of  a  nation  will  expand  or  contract  depends  on 
its  fortunes  and  on  its  policy. 

Before  considering  the  problem  of  the  British  National 
Debt,  I  would  say  that  men  are  apt  to  confuse  real  wealth 
and  paper  wealth.  The  former  is  obviously  far  more 
important  than  the  latter.  Moreover,  in  discussing  the 
influence  of  the  National  Debt  upon  the  wealth  of  a 
nation,  we  must  carefully  discriminate  between  debt 
held  at  home  and  debt  held  abroad.  Happily,  Britain’s 
foreign  indebtedness  is  relatively  small.  The  bulk  of 
the  British  War  Debt  is  held  in  the  country.  The 
British  paper  debt  is  therefore  balanced  by  an  almost 
equally  great  British  paper  wealth.  The  fact  that  a 
great  domestic  debt  does  not  impoverish  a  nation  can 
easily  be  proved.  If  we  assume  the  impossible,  if  we 
assume  that  the  whole  British  debt  should  be  repudiated, 
the  loss  to  the  owners  of  the  debt  would  be  almost  exactly 
balanced  by  the  gain  to  the  nation  as  a  whole.  A  number 
of  capitalists  would  be  ruined,  but  the  real  wealth  of  the 
country,  which  consists  in  the  great  wealth-creating 


40 


BRITAIN’S  TRUE  WEALTH 


resources,  such  as  fields,  factories,  mines,  etc.,  would  be 
as  great  as  ever.  During  the  Revolution  France  repeatedly 
repudiated  her  national  debt.  Yet  at  the  end  of  the 
revolutionary  period  the  country  was  considerably  richer 
than  at  its  beginning. 

A  large  national  debt  may  inconvenience,  but  cannot 
impoverish,  a  nation  as  long  as  the  nation  preserves  its 
great  wealth-creating  resources,  and  as  long  as  the  bulk 
of  the  debt  is  held  at  home.  An  unduly  large  foreign 
debt  would  require  gigantic  yearly  payments  for  interest, 
and  these  payments  would  be  made  nominally  in  gold. 
In  reality  they  would  be  affected  by  large  yearly  exports 
of  goods  which  would  not  be  balanced  by  correspondingly 
large  imports.  It  follows  that  a  large  foreign  debt 
would  impoverish  Great  Britain  to  some  extent.  The 
foreign  bondholders  would  be  in  the  position  of  great 
absentee  landlords.  They  would  drain  the  country  of  a 
large  portion  of  its  real  wealth. 

Financiers  and  bankers  who  spend  their  lives  in  hand¬ 
ling  paper  securities  are  apt  to  attach  undue  importance 
to  paper  wealth.  To  them  paper  is  often  equivalent  to 
wealth.  However,  no  nation  known  to  history  has  ever 
been  crushed  by  its  domestic  paper  debt,  but  many 
nations  have  been  ruined  by  the  destruction  of  their  real 
wealth,  by  the  loss  of  their  great  w’ealth-creating  resources. 
These  may  be  lost  almost  as  easily  in  peace  as  in  war. 
Germany  was  ruined  by  the  Thirty  Years’  War  because 
it  destroyed  half  the  population  and  the  bulk  of  the  live¬ 
stock,  machinery,  and  tools,  because  it  emptied  the  towns 
and  converted  the  agricultural  districts  into  a  wilderness. 
The  vast  wealth  of  the  Arab  Empire  on  the  Euphrates 
was  destroyed  when  the  conquering  Turks  destroyed  the 
canals  and  irrigation  works  of  Mesopotamia,  upon  the 
existence  of  which  the  agriculture  of  the  country  depended 
or  its  prosperity.  The  wealth  of  Venice  was  destroyed 


AND  THE  WAR  DEBT 


41 


in  peace  when  the  Portuguese  discovered  the  sea  route 
to  India  around  the  Cape  of  Good  Hope,  when  the  trade 
between  the  East  and  the  West,  which  was  the  greatest 
wealth-creating  resource  of  Venice,  ceased  to  flow  through 
the  Mediterranean.  The  population  and  wealth  of  France 
became  relatively  stagnant  in  peace  when,  in  the  age  of 
coal,  France  discovered  that  she  possessed  only  an  inade¬ 
quate  supply  of  that  indispensable  mineral. 

Great  Britain  cannot  be  ruined  by  her  paper  debt,  how¬ 
ever  large  it  may  ultimately  be,  but  she  maybe  ruined  by 
the  loss  of  her  wealth-creating  resources. 

Money,  even  gold,  is,  after  all,  merely  a  simulacrum  of 
wealth,  for  real  riches  consist  not  in  counters  made  of 
paper  or  metal,  which  have  only  a  conventional  value, 
but  in  useful  and  necessary  things.  The  Germans  are 
aware  that  the  wealth  of  nations  consists,  not  in  money, 
but  in  real  values ;  that  real  wealth  is  derived  from  the 
great  natural  resources,  such  as  fruitful  territories,  useful 
minerals,  and  men.  They  have  therefore  striven  to  seize 
the  great  wealth-creating  resources  of  their  opponents. 
They  have  occupied,  and  they  mean  to  retain,  the  vast 
coal  and  iron  fields  of  Belgium,  France,  and  Russia,  and 
the  oilfields  of  Rumania,  the  value  of  which  is  absolutely 
incalculable.  If  Great  Britain  should  be  victorious, 
she  will  retain  her  great  wealth-creating  resources,  the 
exploitation  of  which  has  only  begun.  These  resources 
will  in  course  of  time  yield  undreamt-of  wealth,  which 
will  easily  pay  for  the  cost  of  the  War.  If,  on  the  other 
hand,  she  should  be  defeated  and  compelled  to  sue  for 
peace,  the  Germans  would  presumably  treat  her  as  they 
have  treated  Russia.  They  would  very  likely  break  up 
the  United  Kingdom  and  the  British  Empire.  They 
would  most  probably  occupy  Ireland,  and  would  occupy 
and  exploit  the  British  coalfields,  the  mineral  contents 
of  which,  at  the  rate  of  10s.  per  ton,  are  worth  about 


42 


BRITAIN’S  TRUE  WEALTH 


£100,000,000,000,  or  six  times  as  much  as  the  so-called 
national  wealth  of  the  country.  Thus  they  would  at 
the  same  time  vastly  enrich  themselves  and  ruin  Great 
Britain  for  all  time. 

If  the  War  should  end  in  Britain’s  victory,  the  cost  of 
the  struggle,  however  great,  will  appear  small  to  future 
generations,  for  the  wealth  of  nations  tends  to  increase 
at  an  ever-growing  rate.  That  seems  to  be  an  economic 
law. 

During  historical  times  the  wealth  of  nations  has 
vastly  increased,  and  there  is  no  reason  for  believing  that 
this  continuous  expansion  of  national  wealth  will  come 
to  a  standstill.  The  universal  and  rapid  increase  of  the 
wealth  of  nations  is  due  to  two  factors :  to  the  vast  and 
continuous  increase  of  the  population  and  the  constantly 
growing  productive  power  of  men  on  the  one  hand,  and 
to  the  rapid  and  continuous  depreciation  of  money  on 
the  other  hand.  Both  factors  will  probably  continue 
to  be  operative  to  the  end  of  civilisation. 

The  depreciation  of  money  alone  should  automatically 
reduce  the  gigantic  British  War  Debt  to  one-half,  and 
perhaps  to  one-quarter,  of  its  nominal  amount  within 
a  few  decades.  This  assertion  seems  so  extraordinary 
that  it  requires  some  explanation. 

For  many  centuries  the  value  of  money  has  been 
shrinking.  From  Professor  Thorold  Rogers’  excellent 
History  of  Agriculture  and  Prices  in  England  we  learn 
that  in  the  thirteenth  century  an  ox  was  worth  about 
10s.,  a  sheep  Is.  6d.,  a  quarter  of  wheat  cost  about  5s., 
while  a  labourer  received  a  wage  of  2d.  or  3d.  per  day. 
Since  then  prices  have  continually  risen.  About  the 
year  1500  an  ox  cost  22s.  6d.,  a  sheep  2s.  4d.,  a  quarter 
of  wheat  5s.  6d.,  and  a  labourer  was  given  a  wage  of 
5d.  or  6d.  per  day.  In  the  year  1500  old  people  were  no 
doubt  very  indignant  at  the  colossal  rise  in  prices.  Very 


AND  THE  WAR  DEBT 


43 


likely  they  complained  then  about  profiteering  and  about 
the  extortionate  demands  of  the  workers,  exactly  as 
people  do  nowadays.  In  the  Middle  Ages  powerful 
Sovereigns  raised  with  difficulty  on  the  security  of  their 
Crown  jewels  or  of  a  province  a  loan  of  a  few  thousand 
pounds,  for  that  was  at  the  time  a  gigantic  sum.  From 
the  early  Middle  Ages  to  the  present  day  money  has 
continued  depreciating.  An  American  mechanic  now 
earns  a  sum  that  was  formerly  considered  to  be  a  King’s 
lansom.  The  depreciation  of  money  has  not  yet  come 
to  an  end. 

Economists  frequently  state  that  the  great  and  con¬ 
tinuous  depreciation  of  money  has  been  caused  by  the 
great  and  constantly  increasing  production  of  gold  and 
silver.  That  is,  in  my  opinion,  merely  one  of  the  causes, 
but  not  the  principal  one,  of  that  phenomenon,  I 
believe  the  chief  reason  of  the  universal  depreciation  of 
the  currency  is  to  be  found  in  the  universal  desire  of  men 
to  increase  their  profits  and  their  wages.  The  profiteers 
in  the  counting-house  and  at  the  bench  may  prove  public 
benefactors  against  their  will.  By  constantly  increasing 
their  monetary  demands,  by  insisting  on  doubled  and 
quadrupled  profits  and  wages,  they  may,  and  probably 
will,  depreciate  very  greatly  the  present  value  of  money, 
and  they  may  thus  reduce  the  W ar  Debt  to  one-half  or 
one- quarter.  It  will  be  quite  manageable  when  unskilled 
labourers  receive  a  wage  of  10s.  or  £1  a  day. 

The  wealth  of  advancing  nations  is  not  stationary, 
but  is  susceptible  to  indefinite  expansion.  From  time 
to  time  eminent  economists  and  statisticians  have  cal¬ 
culated  the  wealth  of  their  countries.  However,  what 
they  have  called  “  national  wealth  ”  was  not  the  wealth 
of  their  nation,  which,  rightly  considered,  is  unmeasureable, 
but  was  merely  the  joint  wealth  of  the  individuals  of 
their  generation.  Mulhall’s  Dictionary  of  Statistics  con- 


44 


BRITAIN’S  TRUE  WEALTH 


tains  the  following  estimates  regarding  the  “  national 
wealth  ”  of  the  United  Kingdom: 


Britain’s  National  Wealth. 


In  1660  England  and  Wales,  according  to  Petty  . . 


In  1703 

,,  ,,  Davenant 

In  1774 

„  „  Young 

In  1800  Great  Britain,  according  to  Beeke  and  Eden 

In  1812  United  Kingdom  ,, 

,,  Colquhoun 

In  1822 

,,  Lord  Liverpool 

In  1833  ,,  ,,  ,, 

,,  Pablo  Pebrer 

In  1840  ,,  ,,  ,, 

,,  Porter  . . 

In  1865  ,,  ,,  ,, 

,,  Giffen  . . 

In  1875  ,,  ,,  ,, 

„  Giffen  . . 

In  1885  ,,  ,,  ,, 

„  Giffen  . . 

In  1903  ,,  ,,  ,, 

„  Giffen  . . 

In  1903  British  Empire  ,, 

„  Giffen  . . 

£ 

250,000,000 

490,000,000 

1,100,000,000 

1,740,000,000 

2,190,000,000 

2,600,000,000 

3,750,000,000 

4,100,000,006 

6,113,000,000 

8,548,000,000 

10,037,000,000 

15,000,000,000 

22,250,000,000 


In  1660  England’s  national  wealth  was  exceedingly  small. 
It  was  inferior  to  the  deposits  in  one  of  the  leading 
London  Banks  of  the  present.  It  was  smaller  than 
Mr.  Rockefeller’s  wealth.  Between  1660  and  1903  the 


wealth  of  the  United  Kingdom  increased  sixtyfold. 
Between  1800  and  1903  it  grew  eightfold. 

Mulhall  gives  the  following  estimates  regarding  the 
national  wealth  of  France : 


France’s  National  Wealth. 


In  1789,  according  to  Lavoisier 
In  1815  „  ,,  Chaptal 

In  1853 
In  1871 

In  1879  ,,  ,,  Leroy  Beaulieu 

In  1885  ,,  ,,  Guyot 


99 

,,  Girardin 
,,  Wolowski 

99 


1,520,000,000 

1,800,000,000 

5,000,000,000 

7,000,000,000 

7,520,000,000 

8,560,000,000 


Between  1815  and  1885  the  wealth  of  the  French  citizens 
increased  almost  fivefold. 

The  increase  of  the  wealth  of  England  and  France 
shown  in  these  tables  is  partly  real  and  partly  fictitious. 


AND  THE  WAR  DEBT 


45 


It  is  due  in  part  to  the  increase  of  population  and  of 
national  production,  and  in  part  to  the  depreciation 
of  the  currency.  During  the  last  century  the  purchasing 
power  of  the  sovereign  has  declined  to  about  one-half. 
A  pound  is  now  worth  only  as  much  as  ten  shillings  were 
in  1815.  The  war  debt  of  £840,850,491  which  existed 
at  the  end  of  the  Napoleonic  War  was  therefore  reduced 
to  £420,425,245  by  the  shrinkage  of  the  purchasing 
power  of  the  currency.  The  war  debt  of  1815  appears 
small  to  the  present  generation.  Similarly,  the  War 
Debt  of  1918  may  appear  small  to  future  generations. 

The  increase  in  the  accumulated  wealth  of  the  citizens 
is  naturally  accompanied  by  a  similar  increase  in  their 
income.  This  increase  also  is  partly  real  and  partly 
fictitious.  The  following  estimates  show  its  progress 
during  recent  years : 


Income  of  the  United  Kingdom. 


In  1884,  according  to  Sir  Louis  Mallet 


In  1883 
In  1885 
In  1904 
In  1904 
In  1907 


„  Prof.  Leone  Levi  . . 

,,  Prof.  Arthur  Marshall 
,,  Chiozza  Money 
,,  A.  L.  Bowley 
,,  Census  of  Production 


£ 

1,289,000,000 

1,274,000,000 

1,125,000,000 

1,710,000,000 

1,800,000,000 

2,000,000,000 


In  1913-1914  the  income  of  the  British  people  came 
probably  to  £2,500,000,000.  It  has  doubled  in  thirty 
years. 

For  the  purpose  of  this  chapter  it  is  idle  to  inquire  how 
far  the  increase  in  the  wealth  and  income  of  the  British 
nation  is  due  to  increased  population  and  to  increased 
production,  and  how  far  it  is  due  to  the  declining  value 
of  the  currency.  The  chief  point  is  to  establish  that 
wealth  and  income,  as  measured  in  money,  have  a 
tendency  to  increase  continually  and  very  rapidly.  The 
new  War  Debt  is  a  money  debt.  It  has  to  be  settled  by 


46 


BRITAIN’S  TRUE  WEALTH 


money  payments.  It  will  be  paid  off  in  the  same  way 
in  which  the  British  war  debts  have  been  paid  off  in  the 
past,  and  the  repayment  will  be  greatly  facilitated  by  the 
progressive  increase  of  wealth  and  income,  and  by  the 
equally  progressive  depreciation  of  the  currency  which 
-  should  take  place  in  the  future  and  with  which  we  may 
calculate. 

The  vastly  increased  ability  of  the  British  people  to 
pay  increased  taxes  may  be  seen  from  the  following  most 
remarkable  and  most  noteworthy  figures : 

£ 

British  Tax  Revenue  in  1815  . .  . .  72,210,512 

„  „  „  „  1917-1918  ..  707,234,565 

In  1792,  when  the  great  war  with  France  began,  the 
British  Tax  Revenue  amounted  to  £19,258,814.  It 
was  more  than  trebled  in  the  course  of  the  struggle.  It 
reached  its  maximum  in  1 8 1 5 .  The  raising  of  £72, 210, 512 
seemed  to  the  British  tax-payers  of  the  time  the  maxi¬ 
mum  effort  possible.  In  1917-1918  the  United  King¬ 
dom  raised  by  means  of  taxes  practically  ten  times  as 
much  as  it  had  raised  in  1815.  During  a  century  Britain’s 
financial  strength  has  grown  tenfold,  partly  through 
increased  production  and  partly  through  the  depreciation 
of  the  currency.  It  is  quite  conceivable  that  during  the 
next  hundred  years  the  real  and  fictitious  wealth  of  Great 
Britain  may  expand  as  fast  as  it  has  done  during  the  pre¬ 
ceding  century.  If  that  should  be  the  case,  the  United 
Kingdom  may  in  the  year  2017  have  a  national  wealth 
of  £150,000,000,000,  a  yearly  income  of  £25,000,000,000, 
and  may  be  able,  in  case  of  need,  to  provide  in  a  single 
year  a  revenue  of  £7,000,000,000.  The  cost  of  the  War, 
however  great,  may  appear  as  trifling  to  the  grand¬ 
children  and  great-grandchildren  of  the  present  generation 
as  the  cost  of  the  Napoleonic  War,  which  appalled  the 
generation  of  Waterloo,  appears  to  us  now. 


AND  THE  WAR  DEBT 


47 


The  fact  that  Great  Britain’s  income  and  wealth  can 
very  rapidly  and  very  greatly  be  increased  scarcely  needs 
proving.  In  a  manufacturing  country  the  progress  of 
wealth  and  of  income  depends  upon  production.  I 
have  shown  in  a  recently  published  book,*  by  means 
of  the  most  reliable  official  figures  available,  that 
the  American  workers  employed  in  the  manufacturing 
industries  produced  per  head  before  the  War  about  three 
times  as  much  as  their  British  colleagues  engaged  in  the 
identical  callings,  largely  because  they  employed  per 
thousand  men  three  times  as  much  engine- power. 
American  labour  engaged  in  mining,  in  agriculture,  and 
in  transport  also  is  approximately  three  times  as  efficient 
as  is  British  labour.  It  follows  that  the  United  Kingdom 
can  treble  its  wealth  and  income  by  Americanising  its 
industries,  that  it  thereby  can  increase  its  wealth  from 
£15,000,000,000  to  £45,000,000,000,  and  its  yearly  income 
from  £2,500,000,000  to  £7,500,000,000.  The  process  of 
Americanising  the  British  industries  has  already  begun, 
as  I  have  pointed  out  in  another  chapter  of  the  book 
mentioned.  The  country  is  therefore  dt  present  consider¬ 
ably  richer  than  it  was  before  the  War,  and  herein  lies 
the  reason  that  the  taxpayers  have  been  able  to  provide 
easily  the  gigantic  sums  needed  for  financing  the  War. 

Those  who  pessimistically  compare  Britain’s  War  Debt 
with  its  so-called  national  wealth  of  £15,000,000,000 
should  remember  that  a  country’s  wealth  is  not  fixed 
for  all  time,  but  is  susceptible  of  indefinite  expansion, 
and  they  should  endeavour  to  gauge  the  value  of  some 
of  the  country’s  latent  resources.  The  United  Kingdom 
possesses,  for  instance,  as  we  have  seen,  approximately 
200,000,000,000  tons  of  coal,  which  alone  are  worth 
£100,000,000,000  at  the  pit’s  mouth.  In  reality  the  coal 

*  “The  Great  Problems  of  British  Statesmanship.”  John 
Murray,  London,  1917. 


48 


BRITAIN’S  TRUE  WEALTH 


of  the  nation  is  worth  far  more  than  £100,000,000,000. 
With  ten  shillings’  worth  of  coal  may  be  produced  several 
pounds’  worth  of  cotton  goods  or  of  dyes  or  of  chemi¬ 
cals.  Earths  which  are  worthless  in  themselves  may  be 
converted  into  aluminium,  buildings,  ships,  or  the  most 
precious  porcelains.  We  have  only  begun  to  exploit  the 
riches  of  the  world.  We  may  soon  succeed  in  harnessing 
the  tides.  The  economic  possibilities  of  the  future  are 
unlimited. 

The  development  of  a  nation’s  wealth  depends  upon  the 
exploitation  of  the  forces  of  Nature  by  man.  Two  acres 
should  produce  more  wheat  than  a  single  one.  Two 
men  should  produce  more  value  than  a  single  man.  A 
man  employing  powerful  machinery  may  produce  as 
much  wealth  as  a  hundred  men  who  work  with  their  hands. 
The  development  of  national  wealth  depends  mainly 
on  four  factors:  on  the  extent  of  the  national  territory, 
on  the  natural  resources,  on  the  number  of  the  inhabitants, 
and  on  the  efficiency  of  citizens.  The  limited  area  of  the 
United  Kingdom  contains  only  a  limited  quantity  of 
natural  riches.  Therefore  it  can  nourish  only  a  limited 
number  of  people  and  produce  only  a  limited  amount  of 
wealth.  The  expansion  of  Britain’s  wealth  and  popula¬ 
tion  is  circumscribed  by  the  narrowness  of  the  national 
territory.  The  outlying  portions  of  the  Empire  are  more 
than  a  hundred  times  as  large  as  the  British  Isles.  They 
contain  vast  resources  of  every  kind  which  await  man’s 
exploitation.  The  Continent  of  Australia  contains  fewer 
people  than  London.  Canada,  Australia,  and  South 
Africa  will  gradually  fill  up.  The  population  and  the 
wealth  of  the  Dominions  and  Colonies  should  grow  much 
faster  than  the  population  and  wealth  of  the  Motherland. 
Before  very  long  the  daughter-States  should  exceed  the 
Motherland  both  in  white  population  and  in  wealth. 
They  will  therefore  be  better  able  to  assume  a  large 


AND  THE  WAR  DEBT 


49 


portion  of  the  War  Debt  than  they  are  at  present,  and  they 
will  undoubtedly  be  found  ready  to  shoulder  their  share 
of  the  burden,  for  the  War  has  been  fought  not  only  for 
Great  Britain,  but  for  the  British  Empire  and  the  British 
race.  Let  us  therefore  endeavour  to  cast  a  glance  into 
the  Empire’s  future. 

As  the  statistics  relating  to  the  Empire  are  rather 
fragmentary,  and  as  comprehensive  British  Imperial 
statistics  scarcely  exist,  I  would  illustrate  the  probable, 
or  at  least  the  possible,  development  of  the  British  Empire 
in  power  and  wealth  by  means  of  the  excellent  statistics 
relating  to  the  United  States.  The  United  States  have 
furnished  a  brilliant  example  of  successful  development 
to  the  British  daughter-States,  and  they  have  provided 
us  with  the  necessary  exact  statistical  information.  They 
were  the  first  great  country  which  published  exhaustive 
censuses  of  population,  of  wealth,  etc.  The  first 
American  census  of  population  was  taken  in  1790.  Data 
for  the  preceding  decades  have  been  given  by  the  American 
Census  Bureau  in  a  special  Report  entitled  A  Century  of 
Population  Growth ,  published  in  1909.  We  learn  from 
these  official  sources  that  the  population  of  the  United 
States  has  increased  as  follows : 


Population  of  the  United  States. 


1610  . . 

210 

1770  . . 

2,205,000 

1620  . . 

2,499 

1780 

2,781,000 

1630 

5,700 

1790 

3,929,625 

1640 

27,947 

1800 

5,308,483 

1650 

51,700 

1810  . . 

7,238,881 

1660  .  . 

84,800 

1820 

9,638,453 

1670  .  . 

114,500 

1830  . . 

.  .  12,866,020 

1680  .  . 

155,600 

1840 

. .  17,069,453 

1690  .  . 

213,500 

1850 

.  .  23,191,876 

1700 

275,000 

1860  . . 

.  .  31,443,321 

1710  .. 

357,500 

1870  .  . 

.  .  38,558,371 

1720  . . 

474,388 

1880  . . 

.  .  50,155,783 

1730  . . 

654,950 

1890  . . 

.  .  62,947,714 

1740 

889,000 

1900  . . 

.  .  75,994,575 

1750  . . 

.  .  1,207,000 

1910  . . 

..  92,174,515 

1760  . . 

.  .  1,610,000 

1912  . , 

. .  95,410,503 

50 


BRITAIN'S  TRUE  WEALTH 


The  growth  of  the  population  of  the  United  States  has 
been  most  remarkable,  but  the  growth  of  the  wealth  of 
the  people  has  been  even  more  wonderful.  In  1790  the 
slender  wealth  of  the  United  States  was,  according  to  the 
Government  Report  mentioned,  composed  as  follows : 

Dols. 

Land  and  buildings  . .  . .  . .  347,767,000 

Slaves  . .  . .  . .  . .  . .  104,643,600 

Live  stock  and  all  other  property  . .  100,000,000  } 

Total  .  552,410,600 

In  1790  Great  Britain  was  about  fifteen  times  as  rich 
as  were  the  United  States.  Now  the  United  States  are 
more  than  twice  as  rich  as  is  the  United  Kingdom.  Since 
1790  the  wealth  of  the  United  States  has  increased  at  a 
prodigious  rate.  It  has  increased  much  faster  than  the 
population.  Detailed  American  censuses  relating  to  the 
wealth  of  the  inhabitants  have  been  published  since  1850. 
The  following  table  shows  that  the  wealth  of  the  American 
people  has  increased  infinitely  faster  than  has  their 
number : 


Y  ear. 

Inhabitants. 

W  ealth. 

Wealth 
per  Head. 

1790  . . 

3,929,625 

Dols. 

552,410,600 

Dols. 

140.57 

1850  .  . 

23,191,876 

7,135,780,000 

307.69 

1860  .  . 

31,443,321 

16,159,616,000 

513.93 

1870  . . 

38,558,371 

30,068,518,000 

779.83 

1880  . . 

50,155,783 

43,642,000,000 

870.20 

1890  . . 

62,947,714 

65,037,091,000 

1,035.57 

1900  .  . 

75,994,575 

88,517,307,000 

1,164.79 

1904  . . 

82,466,551 

107,104,212,000 

1,318.11 

1912  .  . 

95,410,503 

187,739,071,090 

1,965.00  j 

Between  1790  and  1912  the  population  of  the  United 
States  has  grown  twenty-fourfold  and  their  wealth  three 
hundred  and  fortyfold.  Hence  the  wealth  per  head  of 


AND  THE  WAR  DEBT 


51 


population  has  increased  fourteenfold.  As  in  the  mean¬ 
time  the  value  of  the  dollar  has  decreased  to  one-half, 
the  real  wealth  per  head  has  increased  approximately 
sevenfold.  Between  1850  and  1912  the  population  of  the 
United  States  has  increased  fourfold  and  their  wealth  no 
less  than  twenty-sixfold,  while  the  wealth  per  head  of 
population  has  increased  six  and  a  half-fold. 

The  wealth  of  the  United  States  is  very  unequally 
distributed  by  States,  and  has  expanded  in  a  very  unequal 
manner.  It  is  highly  significant  that  the  richest  American 
States  are  those  of  the  North,  which,  comparatively, 
have  a  poor  soil  and  a  rigorous  climate,  but  which  are 
rich  in  coal  and  iron  and  are  geographically  most  favour¬ 
ably  situated  for  the  successful  pursuit  of  manufacturing 
and  commerce.  The  States  of  New  York,  Pennsylvania, 
and  Illinois,  which  together  have  less  than  one- thirtieth 
of  the  national  territory,  possess  almost  exactly  one-third 
of  the  national  wealth,  because  in  these  States  the  use 
of  labour-saving  machinery  has  been  brought  to  the  very 
highest  perfection.  On  the  other  hand,  the  cotton,  sugar, 
and  tobacco  producing  semi-tropical  States  of  the  South, 
which  have  the  richest  soil  and  the  gentlest  climate,  but 
in  which  labour-saving  machinery  is  comparatively  little 
employed  and  the  manufacturing  industries  are  little 
developed,  are  among  the  poorest  States  of  the  Union, 
and  their  wealth  is  growing  comparatively  slowly. 
Between  1850  and  1912  the  wealth  of  New  York  State 

v 

has  grown  twenty-fivefold,  that  of  Pennsylvania  twenty¬ 
twofold,  and  that  of  Illinois  one  hundredfold.  On  the 
other  hand,  the  wealth  of  Louisiana,  Alabama,  and 
Tennessee  has  grown  only  ninefold,  and  that  of  Virginia 
only  sixfold.  In  the  past,  before  the  age  of  coal  and  iron, 
Virginia  was  the  most  populous  and  the  wealthiest  State 
of  the  Union.  It  occupied  a  position  of  pre-eminence 
similar  to  that  which  is  now  held  by  New  York. 


52 


BRITAIN’S  TRUE  WEALTH 


Vast,  thinly  settled,  and  apparently  worthless  terri¬ 
tories  may  become  exceedingly  wealthy  and  populous  by 
the  advance  of  civilisation.  This  fact  is  well  illustrated 
by  the  history  of  the  United  States  and  of  Canada.  In 
1763,  when  France  lost  Canada  to  Great  Britain,  the 
country  had  only  65,000  white  inhabitants,  and  Voltaire 
jestingly  expressed  his  surprise  that  two  great  nations 
should  fight  one  another  “  pour  quelques  arpents  de 
neige.”  Voltaire  could,  of  course,  not  foresee  that  steam 
and  steel  would  abolish  distance,  that  Canada  would 
become  a  great  nation  which  in  a  couple  of  centuries 
might  exceed  France  in  population  and  wealth.  Canada 
contains  seventy  times  as  much  coal  as  France,  and  con¬ 
siderably  more  coal  than  all  Europe.  That  resource 
alone  ensures  the  future  greatness  and  prosperity  of  the 
country. 

The  purchase  of  Louisiana  by  the  United  States  is  one 
of  the  greatest  romances  of  history.  In  1803  Napoleon 
urgently  required  funds  for  carrying  on  the  government, 
and  he  was  reluctant  to  increase  existing  taxation.  At 
that  time  the  great  colony  of  Louisiana  belonged  to  France. 
The  town  of  New  Orleans,  on  the  Mississippi  River, 
formed  part  of  that  colony.  It  was  the  great  port  of  the 
Mississippi  Valley.  As  the  American  trade  which  flowed 
up  and  down  the  Mississippi  was  being  impeded  and 
obstructed  at  New  Orleans,  the  United  States  wished  to 
purchase  that  town  from  France.  Mr.  James  Monroe, 
who  later  on  became  President  and  promulgated  the 
celebrated  doctrine  which  bears  his  name,  was  sent  to 
France,  and  was  authorised  to  buy  New  Orleans  for 
$2,000,000,  acting  in  conjunction  with  the  American 
Ambassador,  Mr.  Livingston.  In  1803  Louisiana  was 
inhabited  by  about  100,000  people,  of  whom  only  50,100 
were  whites,  the  rest  were  negroes  and  half-castes.  The 
actual  and  prospective  value  of  the  colony  was  considered 


AND  THE  WAR  DEBT 


53 


by  many  to  be  insignificant.  Its  chief  value  was  supposed 
to  consist  in  the  harbour  and  town  of  New  Orleans. 

When  Napoleon  was  offered  $2,000,000  for  New 
Orleans  he  refused,  but  he  declared  to  Marbois,  his 
Minister  of  Finance,  that  he  would  sell  to  the  United 
States  the  whole  of  Louisiana  for  100,000,000  francs  or 
£4,000,000.  That  seemed  a  colossal  sum  for  an  un¬ 
inhabited  waste.  Marbois  discussed  Napoleon’s  offer  in 
a  friendly  manner  with  Mr.  Livingston,  the  American 
Ambassador.  The  latter  reported  to  his  Government 
the  gist  of  the  conversation  in  a  despatch,  dated  April  13, 
1803,  which  may  be  found  in  the  collected  American 
State  Papers.  Livingston  wrote : 

t 

Seeing  by  my  looks  that  I  was  surprised  at  so  extrava¬ 
gant  a  demand,  he  (Marbois)  added  that  he  considered 
the  demand  as  exorbitant,  and  had  told  Napoleon  that 
the  thing  was  impossible.  ...  I  (Livingston)  told  him 
that  we  had  no  sort  of  authority  to  go  to  a  sum  that  bore 
any  proportion  to  what  he  mentioned;  but  that,  as  he 
himself  considered  the  demand  as  too  high,  he  would 
oblige  me  by  telling  me  what  he  thought  would  be  reason¬ 
able.  Marbois  replied  that,  if  we  would  name  60,000,000 
francs  and  take  upon  us  the  American  claims  to  the 
amount  of  20,000,000  francs  more,  he  would  try  how  far 
this  would  be  accepted. 

On  April  30  Monroe  and  Livingston  signed,  on  their 
own  responsibility,  a  treaty  whereby  France  ceded  to  the 
United  States  Louisiana  against  the  payment  of  60,000,000 
francs.  The  two  American  representatives  reported  their 
unauthorised  action  to  the  Secretary  of  State,  Mr.  Madi¬ 
son,  in  a  letter  dated  May  13,  in  which  they  tried  to 
justify  their  action.  They  stated : 

Sir, — We  have  the  pleasure  to  transmit  to  you  by 
M.  Derieux  a  treaty  which  we  have  concluded  with  the 
French  Republic  for  the  purchase  and  cession  of 
Louisiana.  .  .  .  An  acquisition  of  so  great  an  extent 

5 


54 


BRITAIN’S  TRUE  WEALTH 


was,  we  well  know,  not  contemplated  by  our  appointment ; 
but  we  are  persuaded  that  the  circumstances  and  con¬ 
siderations  which  induced  us  to  make  it  will  justify  us 
in  the  measure  to  our  Government  and  country.  .  .  . 
The  terms  on  which  we  have  made  this  acquisition,  when 
compared  with  the  objects  obtained  by  it,  will,  we  flatter 
ourselves,  be  deemed  advantageous  to  our  country.  We 
have  stipulated,  as  you  will  see  by  the  treaty  and  con¬ 
ventions,  that  the  United  States  shall  pay  to  the  French 
Government  sixty  millions  of  francs  in  stock  bearing  an 
interest  of  six  per  cent. ;  and  a  sum  not  exceeding  twenty 
millions  more  to  our  citizens,  in  discharge  of  the  debts 
due  to  them  by  France,  under  the  Convention  of  1800.  .  .  . 

In  estimating  the  real  value  of  this  country  to  the 
United  States  a  variety  of  considerations  occur,  all  of 
which  merit  due  attention.  Of  these,  we  have  already 
noticed  many  of  a  general  nature,  to  which,  however,  it 
may  be  difficult  to  fix  a  precise  value.  Others  present 
themselves  of  a  nature  more  definite,  to  which  it  will  be 
more  practicable  to  fix  some  standard.  By  possessing 
both  banks  (of  the  Mississippi),  the  whole  revenue  or 
duty  on  imports  will  accrue  to  the  United  States,  which 
must  be  considerable.  The  value  of  the  exports,  we  have 
understood,  was  last  year  four  millions  of  dollars.  If  a 
portion  only  of  the  imports  pass  through  that  channel, 
as,  under  our  government,  we  presume  they  will,  the 
amount  of  the  revenue  will  be  considerable.  This  will 
annually  increase  in  proportion  as  the  population  and 
productions  in  that  quarter  do.  The  value  of  the  lands 
in  the  province  of  Louisiana,  amounting  to  some  hundred 
millions  of  acres,  of  the  best  quality,  and  in  the  best 
climate,  is,  perhaps,  incalculable.  From  either  of  these 
sources  it  is  not  doubted  that  the  sum  stipulated  may  be 
raised  in  time  to  discharge  the  debt.  .  .  . 

Permit  us  to  express  an  earnest  wish  that  the  President 
and  Senate  may  decide  with  the  least  possible  delay  on 
the  treaty  and  conventions  which  we  have  concluded, 
and  have  the  pleasure  to  transmit  you.  .  .  . 

The  unauthorised  conclusion  of  the  Louisiana  Purchase 
Treaty  was  severely  criticised  in  the  United  States.  In 
discussing  whether  it  should  be  ratified  or  not,  some 


AND  THE  WAR  DEBT 


55 


Senators  pointed  out  that  it  was  unconstitutional. 
Senator  Plumer  of  New  Hampshire  considered  that  the 
acquisition  of  Louisiana  would  be  ruinous  to  the  Union, 
and  especially  to  New  England.  Senator  White  of 
Delaware  thought  the  acquisition  would  prove  a  curse 
to  the  country,  and  that  the  money  spent  on  its  purchase 
was  exorbitant.  He  stated: 

If  Louisiana  should  ever  be  incorporated  into  the 
Union,  I  believe  it  will  be  the  greatest  curse  that  could 
at  present  befall  us.  It  may  be  productive  of  innumerable 
evils.  .  .  .  Our  citizens  will  be  removed  to  the  immense 
distance  of  two  or  three  thousand  miles  from  the  capital 
of  the  Union,  where  they  will  scarcely  ever  feel  the  ways 
of  the  general  government;  their  affections  will  become 
alienated ;  they  will  gradually  begin  to  view  us  as  strangers ; 
they  wrill  form  other  commercial  connections,  and  our 
interests  will  become  distinct  .  .  .  and  I  do  say  that  under 
existing  circumstances,  even  supposing  that  this  extent 
of  territory  was  a  desirable  acquisition,  fifteen  millions 
of  dollars  was  a  most  enormous  sum  to  give. 

Louisiana  contained  not  merely  “  several  hundred 
millions  of  acres  of  land  of  the  best  quality,”  as  Messrs. 
Livingston  and  Monroe  had  reported,  but  comprised 
875,025  square  miles,  a  territory  more  than  seven  times 
as  large  as  the  United  Kingdom  and  considerably  larger 
than  that  of  the  original  thirteen  colonies.  By  the 
payment  of  a  paltry  15,000,000  dollars  the  United  States 
more  than  doubled  their  territory.  Old  Louisiana  con¬ 
sisted  of  the  lands  on  the  west  bank  of  the  Mississippi, 
from  the  Mexican  to  the  Canadian  border,  and  it  included 
the  whole  of  the  Missouri  River  system.  Out  of  the 
gigantic  territory  purchased  were  carved  the  States  of 
Arkansas,  Colorado,  Iowa,  Kansas,  Louisiana,  Minnesota, 
Missouri,  Montana,  Nebraska,  North  Dakota,  South 
Dakota,  Oklahoma,  Wyoming,  and  the  Indian  Territory. 

According  to  the  United  States  Government  Report, 
Territorial  and  Commercial  Expansion  of  the  United  States, 


56 


BRITAIN’S  TRUE  WEALTH 


published  in  1904,  the  Louisiana  territory  produced,  in 
1 903,  60  per  cent,  of  the  wheat  raised  in  the  United  States, 
over  43  per  cent,  of  the  maize,  42  per  cent,  of  the  oats, 
30  per  cent,  of  the  wool,  30,000,000  tons  of  coal,  16,000,000 
tons  of  iron  ore,  $77,500,000  worth  of  gold  and  silver,  etc. 
The  latent  wealth  of  the  country  is  boundless. 

The  lands  of  the  Louisiana  purchase  possess  the  finest 
agricultural  lands  of  the  United  States,  and  their  subsoil 
is  exceedingly  rich  in  minerals  of  all  kinds.  The  uplands 
abound  in  timber.  As  the  Louisiana  territory  is  in¬ 
habited  by  one-fifth  of  the  American  population,  it  is 
fair  to  assume  that  it  contains  approximately  one-fifth 
of  the  wealth  of  the  country.  At  present  the  wealth 
of  Louisiana  should  therefore  be  about  £7,500,000,000, 
and  before  long  it  should  greatly  exceed  the  wealth  of 
France.  In  a  little  more  than  a  century  a  vast  wilderness 
has  been  peopled  by  millions  of  families,  and  the  capital 
hesitatingly  invested  in  the  purchase  price  in  1803,  which 
seemed  enormous  at  the  time,  has  been  increased  more 
than  3,000-fold,  to  the  vast  benefit  of  the  American 
people.  Their  foresight  and  enterprise  have  been  amply 
rewarded.  The  story  of  the  Louisiana  purchase  shows 
the  superior  value  of  real  wealth,  of  natural  resources, 
and  especially  of  land,  to  money.  That  fact  is  keenly 
appreciated  by  the  British  landed  aristocracy.  It  has 
created  its  wealth. 

It  is  frequently  asserted  that  America’s  wonderful 
progress  in  population  and  in  wealth  is  due  to  the  magnifi¬ 
cent  natural  resources  of  the  country.  The  United 
States  have  undoubtedly  been  singularly  favoured  by 
Nature’s  bounty.  Apparently  they  possess  within  their 
frontiers  the  bulk  of  the  world’s  coal  and  iron,  as  I  have 
endeavoured  to  point  out  in  the  preceding  chapter  of 
this  book.  However,  natural  resources,  even  if  they 
are  exceedingly  great,  cannot  be  converted  into  wealth 


AND  THE  WAR  DEBT 


57 


unless  they  are  vigorously  exploited  by  man.  Possibly, 
one  ought  perhaps  to  say  probably,  the  British  Empire, 
which  has  an  area  four  times  as  large  as  the  United 
States,  and  which  extends  through  all  climes,  possesses 
far  greater  natural  resources  than  the  United  States. 
Unfortunately,  the  natural  resources  of  the  Empire 
have  not  been  sufficiently  developed  by  man.  Their 
exploitation  has  been  left  to  chance,  to  unrestricted 
private  enterprise,  and  the  worst  is  that  no  Imperial 
stock-taking  has  ever  taken  place.  Therefore  we  do  not 
even  know  what  resources  the  British  Empire  possesses. 
It  is  quite  possible  that  its  wealth  in  coal  and  iron  alone 
is  far  greater  than  that  of  the  United  States. 

The  wonderful  growth  of  the  United  States  in  popula¬ 
tion  and  wealth  is  largely  due  to  the  energy  of  the 
American  people  and  to  the  solid  common-sense  and 
enterprise  of  their  rulers.  The  American  Governments 
have  surveyed,  mapped,  and  classified  with  the  greatest 
care  the  natural  resources  of  the  country.  Their  geological 
surveys,  agricultural  surveys,  water-power  surveys,  forest 
surveys,  fishery  surveys,  etc.,  might,  and  should,  serve 
as  models  to  the  British  peoples.  In  matters  economic 
the  Americans  have  not  followed  the  British  policy  of 
drift  and  neglect,  called  laissez  faire,  but  a  far-sighted 
policy  of  wise  and  energetic  action. 

British  economic  policy  has  been  powerfully  influenced 
by  the  teachings  of  British  political  economy,  which  stands 
by  itself.  Unfortunately,  British  political  economy  is 
not  national.  It  is  unnational,  cosmopolitan.  Adam 
Smith,  the  father  of  modern  British  political  economy, 
called  his  celebrated  treatise,  An  Inquiry  into  the  Nature 
and  Causes  of  the  Wealth  of  Nations ,  although  he  almost 
disregarded  the  existence  of  nations.  His  is  not  a 
national,  but  an  individualist,  economy.  He  ought  to 
have  called  his  book,  An  Inquiry  into  the  Nature  and 


58 


BRITAIN’S  TRUE  WEALTH 


Causes  of  the  Wealth  of  Individuals .  Adam  Smith’s 
successors  disregarded  the  existence  of  States  altogether. 
They  spun  their  unprofitable  theories  around  an  abstract 
“  economic  man  ”  whose  only  aim  was  the  pursuit  of 
profit,  and  who  lived  in  an  abstract  world- wide  common¬ 
wealth  without  national  frontiers.  However,  whereas 
Adam  Smith  had  at  least  tried  to  describe  and  develop  an 
economy  of  production  and  had  dwelt  on  the  paramount 
importance  of  production,  his  successors  created  an 
economic  science  which  was  designed  chiefly  for  the 
benefit  of  non-producers,  of  capitalists,  middlemen,  and 
speculators.  Modern  British  political  economy  not  only 
disregards  the  existence  of  nations,  but  it  takes  little 
heed  of  the  interests  of  the  producers.  It  devotes  its 
attention  principally  to  promoting  the  interests  of 
capitalists,  traders,  and  other  non-producers.  The  great 
Ricardo  was  a  stockbroker  and  a  successful  speculator 
Cobden  was  an  unsuccessful  speculator  who  had  twice 
to  be  saved  from  bankruptcy.  These  two  men  are  the 
fathers  of  modern  British  political  economy.  Bliss’s 
Encyclopedia  of  Social  Reform ,  an  American  publication, 
stated  correctly : 

Value  being  taken  as  the  ear-mark  of  wealth,  the 
Ricardian  economics  become  a  theory  of  acquisition, 
attention  being  given  to  the  money-making  propensities 
rather  than  to  productive  activity.  .  .  .  Archbishop 
Whately  designated  the  essential  interest  of  the  utilitarian 
economics  when  he  proposed  the  name  “  Catallactics  ” — • 
the  science  of  exchange. 

The  teachings  of  the  British  economists  have  profoundly 
affected  British  policy.  For  the  benefit  of  the  capitalist, 
the  middleman  and  the  speculator,  the  State  was  to 
remain  absolutely  passive  in  economic  matters.  The 
non-producers  were  given  a  free  hand.  In  the  sacred 
same  of  “  economic  liberty  ”  they  were  allowed  to 


AND  THE  WAR  DEBT 


59 


exploit  and  to  destroy  the  productive  industries  and  the 
strength  of  the  country.  The  destruction  of  the  country’s 
political  and  economic  strength  and  the  spoliation  and 
waste  of  its  great  natural  resources  did  not  matter  so  long 
as  non-producing  capitalists  and  middlemen  flourished. 
Production  was  sacrificed  to  speculation.  The  un¬ 
restricted  enterprise  of  company  promoters,  usurers,  and 
swindlers  of  every  kind  was  considered  more  important 
than  the  welfare  of  the  producers  who  create  the  national 
wealth.  National  strength  and  security  were  sacrificed 
to  the  unrestricted  greed  of  speculators.  The  Stock 
Exchange  was  considered  more  important  than  the  great 
industries.  Paper  wealth  was  placed  above  real  wealth. 
The  development  of  the  great  Imperial  domain  was  left 
to  chance  and  to  the  tender  mercies  of  cosmopolitan 
financiers,  who,  under  the  pretext  of  developing  the 
Empire,  tried  to  fleece  the  British  investors.  No  attempt 
was  made  by  the  Government  to  direct  the  huge  stream 
of  British  emigrants  towards  the  empty  lands  of  the 
Empire,  for  money  was  considered  more  important  than 
men. 

While  British  Governments,  following  a  speculators’ 
policy,  neglected  the  development  of  the  Empire,  and 
disregarded  the  possibility  of  increasing  its  wealth  and 
strength  by  directing  towards  the  Colonies  European 
emigrants,  or  at  least  British  emigrants,  successive 
American  Governments  fostered  immigration  and  pro¬ 
duction  by  all  means  in  their  power.  Between  1820  and 
1910  the  United  States  received  the  immense  host  of 
32,200,594  immigrants.  At  the  census  of  1910  the  Great 
Republic  contained  13,515,886  people  of  foreign  birth 
and  32,243,382  people  of  purely  foreign  blood.  They 
contained  2,557,080  people  born  in  the  United  Kingdom 
and  980,938  born  in  Canada.  In  1910  the  British-born 
population  in  the  United  States  was  almost  as  large  as 


60 


BRITAIN’S  TRITE  WEALTH 


that  of  Australia,  while  the  American  population  of  purely 
British  blood — that  is,  the  British  immigrants  and  their 
American-born  children — numbered  10,490,027,  a  popula¬ 
tion  as  great  as  that  of  Scotland,  Ireland,  and  Wales 
-  combined.  The  Report  of  the  American  National 
Conservation  Commission  estimated  the  value  of  an 
immigrant  at  $1,700  or  £340.  That  is  probably  a  great 
understatement.  At  that  figure  the  British-bom  popula¬ 
tion  in  the  United  States  would  represent  a  value  of  more 
than  £1,000,000,000,  and  the  population  of  purely  British 
blood  a  value  of  more  than  £3,500,000,000.  That 
is  a  gigantic  free  gift  which  might  with  advantage  have 
been  handed  over  to  the  British  Dominions.  It  would  have 
vastly  increased  the  strength  and  wealth  of  the  Empire. 

Wealth  is  created  by  the  exploitation  of  the  resources 
of  Nature  by  man.  While  the  American  people  have 
pursued  the  policy  of  increasing  their  wealth  and  strength 
by  increasing  their  population  and  by  fostering  national 
production  in  all  its  branches,  the  British  people  have 
unfortunately  pursued  the  policy  of  encouraging  specu¬ 
lation  in  all  its  forms  and  of  restricting  both  population 
and  production.  The  British  manufacturers  and  their 
workers,  acting  like  greedy  middlemen  and  scheming 
speculators,  have  consistently  followed  the  disastrous 
policy  of  creating  an  artificial  scarcity,  of  restricting 
output  to  the  utmost,  in  the  hope  of  obtaining  illegitimate 
profits,  and,  guided  by  the  views  of  a  well-meaning  but 
fantastic  clergyman,  who  dabbled  in  political  economy, 
British  statesman,  politicians,  labour  leaders,  and  philan¬ 
thropists,  have  striven  to  create  an  artificial  scarcity  of 
men  as  well.  Cranks  and  schemers  directed  the  policy 
of  the  country.  The  loss  of  population  by  emigration 
to  the  United  States,  was  greeted  as  a  relief  and  as  a  bless¬ 
ing.  Men  preached  that  the  easiest  way  to  make  a  nation 
prosperous  consisted  in  committing  national  suicide  and 


AND  THE  WAR  DEBT 


61 


economic  suicide,  consisted  in  restricting  the  birth-rate 
and  restricting  national  production.  The  United  States 
have  gone  far  ahead  of  the  British  Empire  in  white 
population  and  in  wealth,  although  England  had  an 
enormous  start,  and  although  the  latent  resources  of  the 
Empire  are  probably  infinitely  greater  than  those  of  the 
United  States,  because  British  statesmen,  British  business 
men,  and  the  British  workers  have  consistently  followed 
the  suicidal  policy  of  impeding  the  increase  of  the  national 
wealth  and  of  the  national  strength,  of  impeding  the 
increase  of  the  population  and  the  increase  of  national 
production,  have  followed  an  un-national  and  even  an 
anti-national  policy. 

Wealth,  I  repeat,  is  created  by  the  exploitation  of  the 
resources  of  Nature  by  man.  In  economic  and  military 
contests  success  is  won  by  superiority  in  man-power,  by 
superiority  in  equipment,  and,  last  but  not  least,  by 
superiority  in  leadership.  The  United  States  owe  the 
vast  increase  of  their  wealth  to  the  rapid  increase  of  their 
population  and  to  the  fact  that  the  American  people, 
guided  by  men  of  common  sense,  have  increased  the 
productive  power  of  their  citizens  to  the  utmost  by  the 
most  lavish  use  of  labour-saving  machinery  of  every  kind. 

The  United  States  owe  their  rapid  progress  in  wealth 
and  power  in  the  first  place  to  the  wonderful  development 
of  their  railway  system,  whereby  the  Great  Republic  has 
been  opened  up  in  all  directions.  The  American  railway 
system  has  grown  as  follows : 


United  States  Railway  Mileage. 


Year. 


Miles. 


1850 

1860 

1870 

1880 

1890 

1900 

1910 


9,021 

30,626 

52,922 

93,267 

167,191 

198,964 

249,992 


62 


BRITAIN’S  TRUE  WEALTH 


The  United  States  have  the  most  wonderful  system  of 
railways.  Their  mileage  is  far  greater  than  that  of  all 
Europe,  which  in  1910  had  only  207,432  miles  of  railway. 
All  Europe,  with  458,795,000  inhabitants,  has  actually 
-  fewer  miles  of  railway  than  have  the  United  States.  The 
Great  Republic  possesses  40  per  cent,  of  the  railway 
mileage  of  the  world.  It  is  a  humiliating  fact  that  the 
length  of  its  railways  is  considerably  greater  than  that 
of  the  British  Empire,  the  area  of  which  is  four  times  as 
great  as  that  of  the  United  States. 

The  United  States  have  not  only  the  greatest  railway 
system  in  the  world,  but  the  American  railways  are  the 
most  efficient  railways  existing.  They  pay  the  highest 
wages  in  the  world.  Yet  their  freight  charges  are  among 
the  lowest  in  the  world.  Free  competition,  coupled  with 
adequate  official  supervision  and  guidance,  has  given  to 
the  United  States  an  excellent  railway  system,  a  uniformity 
of  outfit  and  facilities  for  handling  traffic  at  the  cheapest 
freight  rates.  Unrestricted  private  enterprise,  the  un¬ 
restricted  control  of  railways  by  greedy  speculators,  has 
given  to  Great  Britain  the  most  costly  and  perhaps  the 
least  efficient  railway  system  in  the  world,  with  mon¬ 
strously  high  freights.  The  British  railways  have  been 
run,  not  for  the  benefit  of  the  country,  but  for  that  of 
company  promoters,  railway  directors,  stock-speculators, 
and  shareholders,  wrhile  national  production  has  been 
hampered  and  restricted  by  the  exorbitant  freight  rates 
and  the  anti-national  freight  policy  pursued  by  the 
railways. 

The  United  States  possess  the  most  prosperous  and  the 
most  progressive  agriculture,  not  so  much  owing  to  the 
natural  wealth  of  the  country  as  to  the  energy  and  enter¬ 
prise  of  the  American  people.  The  nature  and  the  causes 
of  the  progress  of  America’s  agriculture  may  be  seen  from 
the  following  table: 


AND  THE  WAR  DEBT 


63 


Number 
of  Farms. 

Value  of 
Farms. 

Number 
of  Cattle. 

Number 
of  Horses. 

Value  of 
Agricultural 
Machinery 
Employed. 

1850 

1860 

1870 

1880 

1890 

1900 

1910 

1,449,073 

2,044,077 

2,659,985 

4,008,907 

4,564,641 

5,737,372 

6,361,502 

Dols. 

3,967,343,580 

7,980,493,063 

8,944,857,749 

12,180,501,538 

16,082,267,689 

20,439,901,164 

40,991,449,090 

17.778.907 
25,616,019 
25,484,100 
33,258,000 

52.801.907 
43,902,414 
69,080,000 

4,336,719 

6,249,174 

8,249,000 

11,202,000 

14,214,000 

13,538,000 

21,040,000 

Dols. 

151,587,638 

246,118,141 

270,913,678 

406,520,055 

494,247,467 

749,775,970 

1,265,149,783 

Between  1850  and  1910  the  number  of  American  farms 
has  increased  a  little  more  than  fourfold,  while  their 
value  has  grown  more  than  tenfold.  Vast  improvements 
have  taken  place  throughout  the  agricultural  districts. 
The  number  of  cattle  has  increased  almost  fourfold  and 
that  of  horses  almost  fivefold.  The  principal  reason  for 
the  increase  in  the  value  of  the  farms  lies,  of  course,  in 
the  vast  increase  of  the  American  crops,  which  increase 
is  due  principally  to  the  general  use  of  the  most  powerful 
labour-saving  machinery.  It  will  be  noticed  that  between 
1850  and  1910  the  value  of  agricultural  machinery 
has  increased  eightfold.  As  the  price  of  agricultural 
machinery  has  rapidly  fallen  during  the  period,  it 
follows  that  the  quantity  of  agricultural  machinery  used 
has  increased  far  more  than  eightfold.  It  is  also  worth 
noting  that  the  produce  per  acre  has  steadily  been 
rising  through  the  continuous  improvement  in  culti¬ 
vation. 

Although  the  United  States  have  a  most  flourishing 
and  a  most  prosperous  agriculture,  they  have  not  neglected 
their  manufacturing  industries.  Agriculture  and  manu¬ 
facturing  have  been  simultaneously  promoted,  as  the 
following  comparative  figures  will  show : 


64 


BRITAIN’S  TRUE  WEALTH 


1850 

•  • 

Value  of 
Manufactures. 

Dots. 

1,019,106,616 

Value  of  Agri¬ 
cultural  Produce. 

Dols. 

? 

1860 

1,885,861,676 

? 

1870 

4,232,325,442 

1,958,030,927 

1880 

5,369,579,191 

2,212,540,927 

1890 

9,372,378,843 

2,460,107,454 

1900 

..  11,406,926,701 

4,717,069,973 

1910 

. .  20,672,051,870 

8,498,311,413 

1915 

•  • 

.  .  24,246,434,724 

13,449,310,000 

It  will  be  noticed  that  agricultural  production  and  the 
production  of  manufactures  has  increased  enormously. 
The  progress  of  the  two  has  been  approximately  equally 
great.  To  many  the  United  States  are  still  principally 
an  agricultural  country.  In  reality  the  principal  wealth  of 
the  United  States  is  now  derived  from  manufacturing.  In 
1915  the  wholesale  value  of  manufactured  goods  produced 
was  $24,246,434,724,  which  is  equal  to  £4,849,286,945. 
In  1907  the  total  income  of  the  United  Kingdom  was 
£2,000,000,000,  according  to  the  British  Census  of  Pro¬ 
duction.  It  follows  that  by  manufacturing  alone  the 
United  States  derive  an  income  which  is  considerably 
more  than  twice  as  great  as  the  British  income  derived 
from  manufacturing  and  all  other  sources  combined.  It 
is  therefore  clear  that  in  manufacturing  the  United  States 
are  far  ahead  of  the  United  Kingdom.  Nevertheless, 
there  are  party  politicians  and  economists  of  the  laissez 
faire  school  who  assert  that  England  is  the  richest 
country  in  the  world,  that  she  is  still  the  workshop  of  the 
world,  and  that  she  is  the  foremost  country  in  manufac¬ 
turing.  They  point  proudly  to  her  paper  wealth,  such 
as  her  clearing-house  returns,  her  discount  rate,  the  price 
of  her  Consols,  her  foreign  investments,  etc. 

The  marvellous  advance  in  manufacturing  in  the 
United  States,  like  America’s  wonderful  advance  in  agri- 


AND  THE  WAR  DEBT 


65 


culture,  is  due  to  the  most  lavish  use  of  the  most  perfect 
machinery  whereby  the  productive  power  of  men  can  be 
increased  indefinitely.  The  engine-power  used  in  the 
American  manufacturing  industries  has  increased  in  the 


following  remarkable  manner : 

Horse-Power. 

In  1870  . 

2,346,142 

In  1880  . 

3,410,837 

In  1890  . 

5,938,635 

In  1900  . 

. .  10,097,893 

In  1905  . 

. .  13,487,707 

In  1910  . 

. .  18,675,376 

In  1915  . 

. .  22,547,574 

Since  1870  the  engine-power  employed  in  manufactur¬ 
ing  has  increased  almost  tenfold.  It  almost  doubled 
between  1880  and  1890  and  between  1900  and  1910.  The 
employment  of  electrical  machinery  shows  the  following 
tremendous  progress: 

Horse-Power , 

In  1890  15,569 

In  1900  492,936 

In  1905  1,592,475 

In  1910  4,817,140 

In  1915  8,847,622 

Unfortunately,  no  comparisons  can  be  instituted 
between  the  mechanical  outfit  of  the  British  and  the 
American  manufacturing  industries,  or  between  the  values 
produced  in  agriculture  and  manufacturing  in  the  two 
countries,  for  the  excellent  reason  that  England  pos¬ 
sesses  no  statistics  relating  to  these  subjects.  Exact 
information  regarding  the  position  and  progress  of  the 
British  industries,  the  charges  of  the  railways,  etc.,  is 
wanting.  The  most  necessary  and  the  most  indispen¬ 
sable  information  required  by  the  statesman,  the  adminis¬ 
trator,  and  the  business  man  cannot  be  obtained,  because 
the  body  economic  stands  under  the  influence  of  the 


66 


BRITAIN’S  TRUE  WEALTH 


speculator  and  the  middleman,  who  does  not  require 
exact  information,  and  whose  principal  aim  it  is  to  snatch 
a  profit  at  the  cost  of  the  producers  or  of  the  consumers, 
or  of  both,  by  rigging  the  market,  by  cornering  supplies, 
and  especially  by  creating  an  artificial  scarcity.  For  the 
efficient  conduct  of  the  national  business  complete 
statistics  are  as  indispensable  as  is  careful  book-keeping 
for  the  efficient  conduct  of  any  private  business. 
Gamblers  and  punters  require,  of  course,  no  exact  data. 
When  careful  observers  pointed  out  that  the  British 
industries  had  become  stagnant  and  were  relatively 
declining,  that  agriculture  was  being  destroyed,  that  the 
British  iron  and  steel  industry  was  falling  from  the  first 
rank  to  the  second  and  then  to  the  third  rank  in  the 
world,  they  were  told  that  the  United  Kingdom  was  still 
the  foremost  industrial  country  in  the  world,  and  that 
assertion  was  “  proved  ”  by  the  figures  of  Britain’s 
foreign  trade,  as  if  foreign  trade  were  synonymous  with 
production.  In  the  absence  of  exact  statistical  informa¬ 
tion,  the  disastrous  effect  of  mistaking  paper  wealth  for 
real  wealth,  of  allowing  great  industries — such  as  agri¬ 
culture — to  decay,  of  encouraging  speculation  and  dis¬ 
couraging  production,  of  restricting  the  population,  of 
antagonising  machinery,  and  of  limiting  to  the  utmost 
the  output  of  commodities,  was  discovered  only  when 
Great  Britain  and  the  British  Empire  had  lost  their 
former  industrial  pre-eminence,  when  the  disastrous 
effect  of  the  policy  pursued  could  no  longer  be  hidden  or 
be  explained  away. 

The  United  States  will  certainly  continue  the  policy 
of  encouraging  population  and  production  which  they 
have  followed  hitherto  with  such  brilliant  success.  Hence 
the  future  prospects  of  the  Great  Republic  are  exceedingly 
bright.  In  the  Report  of  the  National  Conservation 
Commission  of  1909  a  cautious  estimate  of  the  future 


AND  THE  WAR  DEBT 


67 


growth  of  the  American  population,  based  upon  its  past 
increase,  was  made.  It  was  as  follows: 


United  States  Population. 


Year. 

Population. 

Increase. 

Bate  of 
Increase. 

1790  .. 

3,929,000 

Per  Cent. 

1800  . . 

5,308,000 

1,379,000 

35 

1810  . . 

7,240,000 

1,931,000 

36 

1820  . . 

9,638,000 

2,399,000 

33 

1830  . . 

12,866,000 

3,228,000 

33 

1840  . . 

17,069,000 

4,203,000 

33 

1850  . . 

23,192,000 

6,122,000 

36 

1860  . . 

31,443,000 

8,251,000 

36 

1870  . . 

38,558,000 

7,115,000 

23 

1880  . . 

50,156,000 

11,597,000 

30 

1890  . . 

62,622,000 

12,466,000 

25 

1900  . . 

75,569,000 

12,946,000 

21 

1910  . . 

90,000,000 

14,431,000 

21 

1920  . . 

104,000,000 

14,000,000 

16 

1930  . . 

119,000,000 

15,000,000 

14 

1940  . . 

134,000,000 

15,000,000 

13 

1950  . . 

150,000,000 

16,000,000 

12 

1960  . . 

167,000,000 

17,000,000 

10 

1970  . . 

184,000,000 

17,000,000 

10 

1980  . . 

202,000,000 

18,000,000 

10 

1990  . . 

225,000,000 

23,000,000 

11 

2000  . . 

249,000,000 

24,000,000 

11 

2010  . . 

274,000,000 

25,000,000 

10 

2020  . . 

299,000,000 

25,000,000 

9 

2030  . . 

325,000,000 

26,000,000 

9 

2040  . . 

350,000,000 

25,000,000 

8 

2050  . . 

375,000,000 

25,000,000 

7 

2060  . . 

400,000,000 

25,000,000 

7 

2070  . . 

425,000,000 

25,000,000 

6 

2080  . . 

450,000,000 

25,000,000 

6 

2090  . . 

475,000,000 

25,000,000 

5 

2100  . . 

500,000,000 

25,000,000 

5 

Even  if  the  increase  of  the  population  should  continue 
slackening,  as  it  did  between  1790  and  1900,  the  popula¬ 
tion  of  the  United  States  should  come  to  249,000,000  in 
the  year  2000,  and  to  500,000,000  in  the  year  2100.  If 


/ 


68 


BRITAIN’S  TRUE  WEALTH 


wealth  per  head  should  during  that  period  remain  abso¬ 
lutely  stationary,  the  United  States  would  have  in  the 
year  2000  a  national  wealth  of  £93,700,000,000,  and  in 
the  year  2100  a  national  wealth  of  £187,500,000,000. 
However,  as  wealth  per  head  has  increased  fourteen¬ 
fold  between  1790  and  1912,  it  is  fair  to  assume  that 
it  will  grow  tenfold  in  each  of  the  succeeding  centuries, 
partly  through  the  progressive  increase  in  men’s  pro¬ 
ductive  power,  partly  through  the  continued  depreciation 
of  the  currency.  Hence  the  national  wealth  of  the 
United  States  may  amount  to  the  almost  unimagin¬ 
able  sum  of  £930,700,000,000  in  the  year  2000,  and  to 
£18,600,000,000,000  in  the  year  2100.  The  latter  sum 
would  be  a  thousand  times  as  large  as  the  present  wealth 
of  the  United  Kingdom. 

The  British  Empire,  spreading  over  all  continents  and 
climes,  is  four  times  as  large  as  the  United  States.  It 
can  nourish  a  far  greater  white  population  than  the 
United  States,  and  it  has  probably  greater  latent  resources 
of  every  kind.  If  a  wise  policy  of  encouraging  population 
and  production  should  be  pursued,  the  British  Empire 
ought,  a  century  hence,  and  two  centuries  hence,  at  least 
to  equal  the  United  States  in  population,  production,  and 
wealth.  To  a  population  of  250,000,000  white  men, 
possessing  sixty  times  as  much  property  as  the  present 
national  wealth  of  the  United  Kingdom,  and  to  a  popula¬ 
tion  of  500,000,000  men  possessing  property  worth  a 
thousand  times  as  much  as  the  present  national  wealth 
of  the  United  Kingdom,  the  few  thousand  million  pounds 
which  the  War  may  cost  will  appear  a  ridiculous  trifle. 
It  will  appear  as  ridiculous  to  the  people  then  living  as 
appears  to  the  present  generation  the  national  wealth 
of  Great  Britain  in  the  time  of  Charles  II.,  which  then 
amounted  to  £250,000,000.  The  cost  of  the  WTar,  how¬ 
ever  great  it  may  be,  even  if  eventually  it  should  vastly 


AND  THE  WAR  DEBT 


69 


exceed  the  so-called  national  wealth  of  Great  Britain,  is 
a  trifle  compared  with  Britain’s  possible  and  probable 
future  wealth.  It  can  easily  be  borne  by  future  genera¬ 
tions.  It  will  scarcely  be  felt  in  a  decade  or  two,  if  the 
Empire  emerges  victorious  from  the  struggle,  and  if  its 
boundless  resources  are  utilised  to  the  full  by  the  policy 
of  encouraging  the  increase  of  population  and  of  pro¬ 
duction.  How  this  may  be  done  will  be  shown  in  a  sub¬ 
sequent  chapter.  The  United  States  have  shown  Britain 
the  way.  If,  on  the  other  hand,  Great  Britain  should  be 
defeated,  Germany  would  undoubtedly  endeavour  to 
prevent  the  rise  of  a  dangerous  competitor  and  opponent 
by  breaking  up  the  United  Kingdom  and  the  British 
Empire,  and  by  depriving  the  British  race  of  those 
essential  natural  resources  upon  which  depend  its  future 
greatness,  strength,  and  prosperity. 

The  expansibility  of  the  British  national  revenue  is 
practically  unlimited.  That  may  be  seen  by  its  continuous 
and  gigantic  increase  in  the  past.  According  to  Sir  John 
Sinclair’s  excellent  book,  The  History  of  the  Public  Revenue , 
published  in  1803,  it  has  grown  as  follows  up  to  1800 : 

British  Government  Revenue. 

£ 


In  the  time  of 

Queen  Elizabeth 

500,000 

9  9 

James  I. 

600,000 

9  9 

Charles  I. 

896,819 

9  9 

The  Commonwealth  . . 

1,517,247 

9  9 

Charles  II. 

1,800,000 

9  9 

James  II. 

2,001,855 

9  9 

William  III . 

3,895,205 

99 

Queen  Anne 

5,691,803 

9  9 

George  I. 

6,762,643 

'  99 

George  II. 

8,522,540 

9  9 

George  III.  (1760) 

15,572,971 

9  9 

„  (1800)  . . 

36,728,000 

In  1913-1914  the  British  revenue  was  £199,011,000, 
in  1917-1918  it  was  £707,234,565,  and  it  should,  according 


70  BRITAIN’S  WEALTH  AND  THE  WAR  DEBT 


to  Mr.  Bonar  Law’s  Budget  estimate,  amount  to 
£842,050,000  in  1918-1919. 

The  steady  and  enormous  increase  of  the  public  revenue 
promises  to  continue  in  the  future  unless  the  Anglo- 
Saxon  race  should  be  defeated  in  the  present  War,  unless 
-  the  British  Empire  and  the  United  States  should  go 
under.  Britain’s  financial  record  of  the  past  and  the 
promise  of  the  future  should  give  courage  to  the  short¬ 
sighted  and  faint-hearted  few  who,  considering  money 
more  precious  than  life,  advocate  that  Great  Britain 
should  make  peace  to  avoid  national  bankruptcy,  who 
see  in  defeat  the  lesser  evil,  who  urge  upon  her  to  commit 
national  suicide,  and  who  are  at  pains  to  discover  a  formula 
wherewith  to  disguise  Britain’s  surrender.  Perhaps 
these  pages  will  alter  their  views.  At  any  rate,  they  show 
that  the  United  Kingdom  is  like  a  mine  of  vast  unex¬ 
plored  wealth  and  of  infinite  promise,  the  scientific 
exploitation  of  which  has  scarcely  begun,  and  that  the 
riches  of  the  British  Empire  are  gigantic  beyond  all 
conception,  and  are  absolutely  unfathomable. 


CHAPTER  IV 


THE  INEFFICIENCY  OF  THE  BRITISH  TRANSPORT 
SYSTEM  AND  OF  BRITISH  AGRICULTURE- 
SOME  LESSONS  FROM  AMERICA* 

In  the  previous  chapter  I  endeavoured  to  show  that  the 
cost  of  the  War,  even  if  it  should  eventually  exceed  what 
is  erroneously  called  Britain’s  national  wealth,  is  a  matter 
of  secondary  importance,  provided  the  struggle  be  brought 
to  a  victorious  end;  that  the  latent  resources  of  Mother¬ 
land  and  Empire  are  practically  boundless;  that  the 
wealth  of  the  Empire  should  grow  in  the  future  about  as 
rapidly  as  it  has  done  in  the  past,  owing  to  the  increase 
of  the  population,  the  increase  of  the  productive  capacity 
of  man,  and  the  shrinkage  in  the  value  of  the  currency 
with  which  we  may  calculate;  that  the  wealth  and  the 
taxable  capacity  of  Great  Britain  have  increased  about 
tenfold  since  1815,  and  may  increase  once  more  tenfold 
during  the  coming  century ;  that  the  wealth  of  the  United 
States  has  grown  three  hundred  and  fortyfold  since 
1790  and  twenty-six-fold  since  1850,  and  is  now  far  greater 
than  that  of  the  British  Empire;  that,  if  the  British 
Empire  should  be  vigorously  developed  in  accordance 
with  the  methods  employed  by  the  United  States,  the 
wealth  of  the  Empire  should  in  the  year  2000  be  about 
sixty  times  as  great  as  the  present  wealth  of  the  United 
Kingdom,  and  should  in  the  year  2100  be  a  thousand 
times  as  great  as  the  present  wealth  of  the  United  King- 

*  From  The  Nineteenth  Century  and  After,  July,  1918. 

71 


72  BRITISH  TRANSPORT  AND  AGRICULTURE 


dom ;  that  therefore  a  hundred  years  hence  the  cost  of  the 
War  with  Germany  may  appear  as  small  as  that  of  the 
Napoleonic  War  appears  to  the  present  generation. 
Economic  progress  similar  to  that  effected  by  America 
can  be  expected  only  if  American  economic  methods  are 
employed,  if  inefficient  traditional  methods  are  abandoned. 
Let  us  therefore  inquire  a  little  more  closely  into  the 
causes  of  America’s  vast  wealth  and  unparalleled  material 
progress. 

Wealth  is  created  by  the  exploitation  of  the  resources 
of  Nature  by  man.  It  follows  that  the  increase  of  the 
wealth  of  a  nation  which  is  endowed  with  great  natural 
resources  depends  mainly  upon  two  factors:  upon  the 
number  of  the  productively  employed  and  upon  the  pro¬ 
ductive  efficiency  of  the  workers. 

Man  is  a  labour-saving  animal.  In  the  course  of  ages 
he  has  increased  his  small  natural  strength,  first  by  using 
rough  tools  made  of  wood  and  stone,  then  by  taming 
animals  and  causing  them  to  work  for  him,  and  lastly 
by  inventing  labour-saving  machinery  driven  by  water¬ 
power,  steam  and  electrical  power,  by  the  use  of  which 
the  strength  and  efficiency  of  a  single  worker  can  be 
increased  a  thousandfold.  Civilisation  is  based  upon  the 
use  of  power,  and  it  may  be  divided  into  three  ages :  the 
age  of  man-power,  the  age  of  animal-power,  and  the  age 
of  engine-power .  The  last  age  commenced  only  yesterday . 
Man’s  power  may  be  increased  indefinitely  by  the  use  of 
automatic  and  semi-automatic  machinery,  and  by  the 
discovery  and  employment  of  new  sources  of  power  such 
as  the  tides  of  the  sea,  the  rays  of  the  sun,  and  other  forces 
yet  undreamt  of.  Hence  the  full  development  of  human 
productivity  and  of  human  wealth  has  only  begun. 

The  Americans  have  recognised  that  the  wealth  and 
strength  of  a  nation  can  best  be  increased  by  increasing 
the  number  of  the  workers  and  by  enlarging  their  pro- 


BRITISH  TRANSPORT  AND  AGRICULTURE  73 


ductive  capacity  to  the  utmost  extent  by  providing  them 
with  the  most  powerful  and  the  most  perfect  labour- 
saving  devices  of  every  kind.  Herein  lies  the  cause  of 
America’s  astonishing  advance  in  power,  population  and 
opulence. 

The  Development  of  Railways  and  Waterways 

The  strength  and  wealth  of  a  great  country  can 
best  be  increased  by  opening  it  up  to  exploitation, 
by  abolishing  the  distances  which  separate  men,  by 
facilitating  to  the  utmost  human  intercourse  and  the 
exchange  of  human  productions.  The  greatness  and 
power  of  the  Roman  Empire  were  based  upon  its  wonder¬ 
ful  system  of  roads,  which  were  built  regardless  of  labour 
and  expense.  The  greatness  and  power  of  the  United 
States  are  based  upon  their  magnificent  railway  system, 
the  mileage  of  which  is  far  greater  than  that  possessed 
by  the  whole  Continent  of  Europe,  and  far  greater  than 
that  of  the  entire  British  Empire.  Let  us  therefore  first 
consider  what  Great  Britain  and  the  British  Empire  may 
learn  from  the  American  railways. 

The  important  and  the  predominant  position  occupied 
by  the  railways  in  the  economy  of  the  United  States  may 
be  seen  from  the  following  extraordinary  figures,  which 
are  taken  from  the  official  Census  of  Wealth  of  the  United 
States  and  which  relate  to  the  year  1912: 

Dols. 

Value  of  the  railways  and  their  equipment  16,148,532,502 

Value  of  manufacturing  machinery,  tools 

and  implements  . .  . .  . .  . .  6,091,451,274 

Value  of  farm  implements  and  machinery . .  1,368,224,548 

The  manufacturing  and  the  agricultural  industries  of 
the  United  States  possess  the  most  powerful,  the  most 
perfect  and  the  most  costly  outfit  in  the  world.  Yet  the 
value  of  the  American  railways,  exclusive  of  the  street 


74  BRITISH  TRANSPORT  AND  AGRICULTURE 


railways,  is  considerably  more  than  twice  as  great  as  that 
of  all  the  industrial  and  agricultural  machinery  in  the 
country.  The  wealth  represented  by  the  American  rail¬ 
ways  is  approximately  as  great  as  the  entire  present 
wealth  of  the  kingdom  of  Italy. 

The  paramount  importance  of  the  American  railway 
industry  may  furthermore  be  gauged  by  comparing  the 
man-power  employed  by  the  railways  with  that  employed 
by  the  two  largest  groups  of  American  manufactures : 

Workers  employed  in  1914. 

Workers. 

By  the  United  States  railways  . .  . .  . .  1,710,296 

By  all  the  textile  industries  ..  ..  ..  1,498,664 

By  the  making  of  iron  and  steel  and  their  products  1,061,058 

America  is  the  land  of  progress.  The  railway  system  of 
the  United  States  is  gigantic  in  size,  and  is  a  model  and 
a  monument  of  human  competence  and  of  ever-progressive 
efficiency.  Industrial  progress  consists  in  increasing 
man’s  power  over  Nature  by  means  of  labour-saving 
devices  of  every  kind.  The  increased  efficiency  of  the 
American  railways  during  recent  years  may  be  gauged 
from  the  following  comparative  data : 


Year. 

Miles  of  Line. 

Employees. 

Tons  Carried. 

1890  .. 

167,191 

749,301 

631,740,036 

1895  .. 

184,628 

785,034 

686,614,778 

1900  .. 

198,964 

1,017,653 

1,081,983,301 

1905  .. 

225,196 

1,382,196 

1,427,731,905 

1910  .. 

249,992 

1,699,420 

1,849,900,101 

1913  .. 

251,984 

1,815,239 

2,058,035,487 

Between  1890  and  1913  the  mileage  of  the  United 
States  railways  has  increased  by  50  per  cent.,  that  of  the 
men  employed  by  them  has  increased  by  142  per  cent., 


BRITISH  TRANSPORT  AND  AGRICULTURE  75 


and  that  of  the  tons  of  goods  carried  by  no  less  than  230 
per  cent.  On  the  Amercan  railways  were  handled,  in 
1890,  843  tons  of  goods  per  employee  per  year.  In  1913 
there  were  handled  1133  tons  of  goods  per  employee  per 
year.  Notwithstanding  the  considerable  shortening  of 
the  hours  of  labour  during  the  period  under  consideration, 
the  quantity  of  goods  handled  per  man  was  increased  by 
nearly  40  per  cent.,  not  because  the  men  had  to  work 
harder,  but  because  of  the  vast  improvements  made  in 
the  organisation  and  in  the  mechanical  outfit  of  the  rail¬ 
ways.  Vast  labour-saving  reforms  were  effected  and  the 
most  perfect  labour-saving  appliances  were  introduced. 
The  advance  made  with  regard  to  the  mechanical  outfit  of 
the  railways  in  some  directions  can  easily  be  summarised 
statistically. 


Year. 

No.  of 
Locomotives. 

No.  of 

Bailway  Cars. 

Tons  of  Goods 
Carried. 

1895 

35,699 

1,270,561 

686,614,778 

1900 

37,663 

1,450,838 

1,081,983,301 

1905 

48,357 

1,842,871 

1,427,731,905 

1910 

58,947 

2,290,331 

1,849,900,101 

1913 

63,378 

2,445,508 

2,058,035,487 

Between  1895  and  1913  the  number  of  locomotives  and 
of  railroad  cars  was  less  than  doubled,  but  during  the 
same  period  the  weight  of  goods  carried  by  the  railways 
was  more  than  trebled.  It  follows  that  the  hauling 
energy  of  the  average  engine  and  the  carrying  capacity  of 
the  average  railway  waggon  was  increased  by  considerably 
more  than  50  per  cent.  It  therefore  becomes  clear  that 
during  recent  years  not  only  the  efficiency  of  the  average 
railway  worker,  but  also  that  of  the  average  engine  and 
truck  has  been  vastly  augmented 


76  BRITISH  TRANSPORT  AND  AGRICULTURE 

The  extraordinary  and  unceasing  improvement  which 
has  been  effected  in  the  outfit  of  the  American  railways 
will  become  still  clearer  from  the  following  most  interest¬ 
ing  table: 


Year. 

Average  Tractive 
Power  of  Single 
Expansion 
Locomotives. 

Average  Weight 
of  Single 
Expansion 
Locomotives. 

Average  Carrying 
Capacity  of — 

Box 

Car. 

Coal 

Car. 

Flat 

Car. 

Stock 

Car. 

All 

Cars. 

Lbs. 

Tons. 

Tons. 

Tons. 

Tons. 

Tons. 

Tons. 

1903 

21,156 

46 

28 

33 

27 

25 

29 

1905 

23,178 

51 

29 

34 

28 

26 

31 

1907 

25.439 

56 

31 

38 

31 

29 

34 

1909 

26,300 

58 

32 

40 

32 

29 

35 

1911 

27,771 

61 

34 

42 

33 

30 

37 

1913 

29,595 

65 

34 

44 

35 

31 

38 

In  1913  there  were  in  the  United  States  60,131  single 
expansion  locomotives.  They  formed  95  per  cent,  of  all 
the  locomotive  engines  existing.  It  will  be  noticed  that 
in  the  short  space  of  time  between  1903  and  1913  the 
weight  and  the  tractive  power  of  the  average  locomotive 
engine  have  been  increased  by  40  per  cent.  During  the 
same  period  the  average  four-cylinder  compound  engine 
has  increased  in  weight  from  70  tons  to  107  tons,  with  a 
similar  increase  in  hauling  capacity.  In  order  to  cheapen 
transport,  larger  and  ever  larger  engines  are  being  built. 
The  most  powerful  locomotive  made  by  the  Baldwin 
Works  in  1914  weighed  426-5  tons  and  hauled  251  huge 
50-ton  cars  fully  loaded.  They  formed  a  train  which 
was  4J  miles  long.  It  represented  a  dead-weight  of 
17,912  tons,  while  the  actual  load  weighed  12,550  tons. 
Scientific  railroading  has  only  begun. 

The  improvement  made  in  the  cars  for  carrying  goods 
was  as  striking  as  that  of  the  locomotives.  Between 
1903  and  1913  the  carrying  capacity  of  the  average  box 


BRITISH  TRANSPORT  AND  AGRICULTURE  77 


car  grew  from  28  tons  to  34  tons,  that  of  the  average  coal 
car  from  33  tons  to  42  tons,  that  of  the  average  flat  car 
from  27  tons  to  35  tons,  that  of  the  average  live-stock 
car  from  25  tons  to  31  tons,  and  that  of  all  cars  from  29 
to  38  tons.  America  knows  no  standstill.  It  will  be 
noticed  that  year  by  year,  without  exception,  the  size 
of  the  average  locomotive  and  of  the  average  car  has  been 
increasing. 

While  the  average  car  on  the  United  States  railways 
carries  now  about  40  tons — vast  numbers  of  coal  and  ore 
cars  carry  from  80  to  100  tons  each — the  British  railways 
still  employ  ridiculous  little  trucks  carrying  4,  5,  8  or 
10  tons,  exactly  as  they  did  in  the  time  of  George  Stephen¬ 
son,  and  much  time  is  wasted  in  adjusting  tarpaulins. 
A  truck  constructed  to  carry  more  than  10  tons  is  a  rarity 
on  the  British  railways.  Unfortunately,  no  exact  British 
statistics  similar  to  the  American  ones  can  be  published, 
because  these  are  not  accessible.  There  is,  of  course,  a 
great  economy  in  using  large  cars.  A  shunter  can  handle 
as  easily  a  large  car  as  a  small  one.  If  the  British  rail¬ 
ways  employ  five  small  cars  instead  of  one  large  one, 
they  have  to  employ  five  times  as  many  men  for  shunting, 
book-keeping,  repairing,  etc.,  and  have  to  spend  five 
times  as  much  money  for  these  services.  Besides,  there 
is,  of  course,  a  greater  percentage  of  dead-weight  in  five 
small  cars  than  in  a  single  large  one. 

By  increasing  from  year  to  year  the  power  of  the 
locomotive  engines  and  the  size  of  the  cars,  and  by  effect¬ 
ing  vast  improvements  in  the  permanent  way,  such  as 
providing  heavier  rails,  abolishing  gradients  and  curves, 
strengthening  bridges,  widening  cuttings  and  tunnels, 
etc.,  the  Americans  have  been  able  to  increase  the  average 
weight  carried  per  train  in  the  most  extraordinary 
manner,  as  is  proved  by  the  following  official  figures : 


78  BRITISH  TRANSPORT  AND  AGRICULTURE 


Average  Number  of  Tons  carried  per  Train. 


In  1890  . . 
In  1895  .. 
In  1900  .. 
In  1905  . . 
In  1910  . . 
In  1913  .. 


Tons. 

177-42 

189-69 

270-86 

322-26 

380-38 

445-43 


The  foregoing  are  merely  average  figures.  Unfortu¬ 
nately,  no  similar  figures  are  available  for  Great  Britain, 
although  such  figures  are  necessary  to  ensure  efficiency. 
The  average  British  train-load  amounts  probably  only 
to  about  100  tons.  A  load  of  150  tons  is  considered  a 
heavy  one  on  an  average.  Occasionally  one  sees  mineral 
trains  which  carry  600  tons  of  coal  with  the  help  of  two 
panting  engines,  but  that  sight  is  a  rare  one.  To  carry 
large  quantities  of  goods  by  means  of  toy-engines,  toy- 
trucks  and  toy-trains  is  an  appalling  waste  of  man¬ 
power.  It  is  as  wasteful  a  proceeding  as  it  would  be  to 
remove  the  contents  of  a  house,  not  in  a  roomy  pan¬ 
technicon,  but  by  means  of  twenty  cabs.  The  inefficiency 
of  the  British  railways  causes  an  extraordinary  waste  of 
man-power,  coal,  money,  etc.,  and  is  a  source  of  endless 
annoyance  and  delay. 

While  in  1913  the  average  American  train-load  was 
455-43  tons  against  an  English  average  load  of  perhaps 
100  tons,  large  numbers  of  coal  trains,  ore  trains,  and 
mixed  goods  trains  may  be  seen  any  day  in  the  United 
States  which  carry  3,000,  4,000  and  more  tons  with  the 
help  of  a  single  engine.  In  the  nineteenth  volume  of  the 
Report  of  the  United  States  Industrial  Commission  of 
1902  we  read: 

The  Illinois  Central,  for  its  low  grade  and  long  haul  to 
the  Gulf,  has  recently  constructed  locomotives  capable 
of  hauling  2,000  tons  of  net  paying  Joad.  Even  this 


BRITISH  TRANSPORT  AND  AGRICULTURE  79 


figure  has  recently  been  surpassed  by  the  New  York 
Central,  which,  with  its  monster  new  Mogul  engines,  is 
planning  to  haul  eighty  loaded  30-ton  cars,  giving  2,400 
tons  of  revenue  freight.  From  these  figures  it  certainly 
appears  that  train-loads  for  long  haul  may  soon  be 
standardised  at  not  less  than  2,000  tons. 

That  was  written  in  1902,  when  the  great  improvement 
in  freight- carrying  had  only  begun. 

During  the  last  few  decades  railway  wages,  taxes,  and 
the  cost  of  materials  have  risen  enormously  in  the  United 
States.  Vast  sums  have  been  spent  by  the  railways  on 
betterments.  Nevertheless,  the  railways  have  been  able 
at  the  same  time  to  lower  their  rates  and  to  increase  their 
earnings  owing  to  their  vast  increase  in  efficiency,  whereby 
their  increased  expenses  have  been  more  than  counter¬ 
acted.  This  double  effect  is  brought  out  in  the  following 
table : 


Year. 

Revenue 
per  Ton 
Mile. 

Revenue  per 
Passenger 
Mile. 

Cost  of 

Running  Train 
One  Mile. 

Freight 
Revenue  per 
Train  Mile. 

Cents. 

Cents. 

Dots. 

Dols. 

1890  .. 

0.927 

2.167 

0.96006 

1.65434 

1895  .. 

0.839 

2.040 

0.93029 

1.61190 

1900  .. 

0.729 

2.003 

1.07288 

2.00042 

1905  .. 

0.766 

1.962 

1.32140 

2.49689 

1910  .. 

0.753 

1.938 

1.48865 

2.86218 

1913  .. 

0.729 

2.008 

1.70375 

3.24347 

Between  1890  and  1913  the  revenue  per  passenger  per 
mile  has  decreased  slightly,  and  that  per  ton  per  mile 
has  diminished  very  considerably.  During  the  same 
period  the  cost  of  running  a  train  one  mile  and  the  freight 
revenue  per  train  mile  have  almost  doubled.  The  doubled 
cost  of  running  trains  has  been  balanced  by  doubling  the 


80  BRITISH  TRANSPORT  AND  AGRICULTURE 


freight  revenue  per  train  mile.  The  latter  was  made 
possible,  notwithstanding  the  substantial  lowering  of  the 
freight  charges  per  ton  per  mile  and  the  vastly  increased 
expenses,  because  the  weight  carried  per  train  had  been 
more  than  doubled  in  the  meantime.  Comparisons  with 
England  are  unfortunately  impossible,  because  the 
British  railways  do  not  provide  statistics  whereby  alone 
their  efficiency  can  be  measured,  and  which  are  considered 
indispensable  not  only  in  the  United  States,  but  in  all 
civilised  countries. 

The  late  Mr.  James  Hill,  the  great  American  railway 
builder  and  owner,  wrote  in  his  book  Highways  of 
Progress  : 

The  important  element  in  transportation  is  the  freight 
rate.  The  average  charge  in  the  United  States  in  1907 
is  given  by  the  Inter-State  Commerce  Commission  as 
0.759  cent  per  ton  per  mile.  ...  In  Great  Britain  it  is 
2.31  cents.  .  .  . 

According  to  the  latest  reports,  the  average  annual 
wage  of  each  employee  of  all  the  railroads  of  the  German 
Empire  was  $352.  The  average  wage  for  the  same  year 
in  Great  Britain  and  Ireland  was  $261.  In  the  United 
States  it  was  $641.  The  American  railway  pays  the 
highest  wages  in  the  world,  out  of  the  lowest  rates  in 
the  world,  after  having  set  down  to  capital  account 
the  lowest  capitalisation  per  mile  of  all  the  great  coun¬ 
tries  of  the  world.  No  other  occupation  and  no  other 
employer  of  labour  in  the  country  can  match  this 
record. 

Of  course,  the  United  States  could  not  build  and  run 
railways  cheaply  had  they  not  possessed  cheap  iron  and 
steel.  They  were  powerfully  assisted  by  the  highly 
efficient  American  iron  and  steel  industries,  which 
developed  mightily  under  the  policy  of  high  protection. 
After  the  introduction  of  high  protection  iron  and  steel 


BRITISH  TRANSPORT  AND  AGRICULTURE  81 


production  increased  enormously,  and  prices  fell  rapidly, 
as  will  be  seen  from  the  following  figures : 


Year. 

Price  of  Pig  Iron. 

Price  of  Steel  Bails. 

1867  . . 

Dols.  per  Ton. 
44.08 

Dols.  per  Ton. 
166.00 

1870  . . 

33.23 

106.79 

1880  . . 

28.48 

67.52 

1890  . . 

18.41 

31.78 

1900  . . 

19.98 

32.29 

1910  . . 

17.36 

28.00 

1914  .. 

15.24 

28.00 

The  iron  and  steel  trades  of  America  have  had  high 
protection,  and  the  makers  have  combined  and  formed 
pools,  trusts,  etc.  According  to  the  doctrines  of  British 
political  economy  these  two  factors  should  have  made  for 
inefficiency  and  high  prices.  In  reality  they  have  made 
for  efficiency  and  low  prices. 

Although  the  charges  of  the  American  railways  have 
been  steadily  reduced,  the  proprietors,  the  capitalists, 
have  not  suffered.  They  have  benefited,  because  the 
shrinkage  in  the  charges  was  more  than  offset  by  the 
economies  effected  by  increased  efficiency.  Between 
1890  and  1913  the  capital  of  the  American  railways  has 
increased  from  $8,984,234,616  to  $19,796,125,712,  or  has 
a  little  more  than  doubled.  During  the  same  period  the 
interest  and  dividends  paid  have  increased  from 
$308,571,315  to  $803,830,306,  or  have  nearly  trebled, 
while  the  dividends  alone  have  increased  from 
$87,071,613  to  $369,077,546,  or  have  more  than  quad¬ 
rupled. 

American  inland  transport  has  been  improved  and 
cheapened,  not  only  by  land,  but  also  by  water.  That 
may  be  seen  from  the  following  figures : 


82  BRITISH  TRANSPORT  AND  AGRICULTURE 


Freight  for  Wheat  from  Chicago  to  New  York  per 

Bushel. 


Year. 

By  Lake  and 
Canal. 

By  Bailway 
only. 

By  Lake  and 
Bail. 

Cents. 

Cents. 

Cents. 

1870  .. 

17.11 

33.30 

22.00 

1880  .. 

12.27 

19.90 

15.70 

1890  .. 

5.85 

14.31 

8.50 

1900  .. 

4.42 

9.98 

5.05 

1910  .. 

5.13 

9.60 

6.57 

Although  the  American  railways  provide  most  excellent 
facilities  for  the  transport  of  goods  at  exceedingly  low 
rates,  the  United  States  have  striven  to  supplement  rail¬ 
way  transport  by  waterway  transport,  because  the  latter 
can  be  effected  more  cheaply  than  the  former.  Enormous 
sums  have  been  spent  by  the  national  Government  and 
the  Governments  of  the  individual  States  on  the  improve¬ 
ment  of  the  national  waterways  and  on  the  construction 
of  canals.  Inland  transport  by  water  has  been  made 
exceedingly  efficient  and  cheap,  and  the  most  important 
waterways,  such  as  the  Sault  Ste.  Marie  Canal,  have  been 
linked  up  with  the  railways,  to  the  vast  benefit  of  the 
American  industries  and  of  the  American  people. 

The  development  of  the  American  iron  and  steel 
industries  was  greatly  hampered  by  geographical  diffi¬ 
culties,  which  at  one  time  seemed  unsur mountable. 
While  in  the  United  Kingdom  coal  and  iron  are  found 
side  by  side,  close  to  the  seashore,  deposits  of  these  two 
minerals  occur  far  inland  both  in  Germany  and  the  United 
States.  The  difficulty  of  smelting  the  iron  ore  was 
increased  by  the  fact  that  both  in  Germany  and  the 
United  States  the  great  deposits  of  iron  ore  were  separated 
by  vast  distances  from  the  coal-beds.  In  Germany  and 


BRITISH  TRANSPORT  AND  AGRICULTURE  83 


in  the  United  States  the  iron  ore  had  therefore  to  be 
carried  to  the  coal,  or  the  coal  to  the  iron  ore,  over  such 
large  distances  and  at  so  vast  an  expense  that  the  rise  of 
a  prosperous  iron  industry  seemed  impossible  in  both 
countries.  At  least  that  was  the  view  which  was  taken 
by  many  British  experts  some  decades  ago.  Successful 
competition  on  the  part  of  the  so  greatly  hampered  iron 
and  steel  industries  of  Germany  and  of  the  United  States 
with  the  so  greatly  favoured  iron  and  steel  industries  of 
Great  Britain  was  possible  only  if  Germany  and  the 
United  States  should  succeed  in  transporting  enormous 
quantities  of  mineral  over  huge  distances  at  apparently 
impossibly  low  rates.  The  Preliminary  Report  of  the 
United  States  Inland  Waterways  Commission  of  1908 
stated : 

More  than  twenty  years  ago  an  English  student  of 
commercial  conditions  visited  the  United  States  to 
investigate  the  outlook  of  the  iron  and  steel  business  in 
this  country.  On  his  return  home  he  gave  assurances  to 
British  iron  manufacturers  that  they  need  have  no  serious 
fears  of  the  competition  of  the  United  States,  because  in 
America  the  great  iron-ore  deposits  were  too  far  distant 
from  coal.  He  was  positive  it  would  never  be  possible 
to  bring  the  ore  to  the  coal,  or  the  coal  to  the  ore,  at  such 
rates  as  would  enable  production  of  iron  and  steel  cheap 
enough  to  compete  with  England. 

How  completely  erroneous  was  this  conclusion  need 
not  be  suggested  now,  because  everybody  is  familiar  with 
the  marvellous  facilities  for  bringing  the  Lake  Superior 
ores  to  the  Pittsburg  iron  district,  and  with  the  success 
of  the  American  iron  and  steel  interests  in  competing 
with  all  the  world,  despite  the  initial  disadvantages  which 
they  had  to  overcome.  Witnesses  before  the  British 
Royal  Commission  repeatedly  declared  that  the  process 
of  bringing  the  Lake  Superior  ores  first  by  rail  to  the  docks 
on  the  upper  lake,  then  by  Lakes  Superior,  Huron,  and 
Erie  to  ports  convenient  to  the  coal  districts,  and  finally 
by  rail  to  the  seats  of  the  iron  industry,  was  the 


84  BRITISH  TRANSPORT  AND  AGRICULTURE 


greatest  achievement  in  transportation  that  the  world 
has  seen. 

So  much  for  the  British  iron-makers’  error  in  under¬ 
rating  the  possibilities  of  internal  transportation  in  the 
United  States.  As  to  Germany,  their  error  was  hardly 
less  striking.  In  the  beginnings  of  the  great  development 
of  the  German  iron  trade,  English  iron  interests  declined 
to  take  German  competition  seriously  because  the  Ger¬ 
man  ore  deposits  were  considered  utterly  inadequate  for 
the  development  of  a  really  great  industry,  and  it  was 
presumed  that  the  transportation  of  great  quantities  of 
foreign  ore  to  the  seats  of  the  German  industries  would 
be  so  expensive  as  to  make  it  utterly  unprofitable.  Yet, 
in  fact,  the  Germans  have  developed  an  iron  industry 
which  is  now  a  matter  of  concern  to  every  competing 
country,  and  which  is  based,  like  that  of  the  United 
States,  on  a  system  of  extremely  cheap  transportation. 
While  there  is  a  large  and  increasing  production  of  iron 
ore  in  Luxemburg,  which  is  utilised  in  the  German  iron 
industry,  and  while  Germany  itself  produces  a  large  and 
growing  annual  tonnage  of  ore,  and  brings  still  other 
large  amounts  from  Austria-Hungary,  it  is  nevertheless 
true  that  the  major  part  of  the  iron  ore  reduced  in  Ger¬ 
many  comes  from  the  Scandinavian  peninsula  and  from 
Spain.  To  the  canals  and  canalised  rivers  of  the  Empire 
is  due  the  credit  for  making  it  possible  thus  to  bring 
foreign  ores  to  the  German  industrial  regions.  Exceed¬ 
ingly  low  rates  are  made,  and  the  tonnage  handled  by 
rivers  and  canals  is  tremendous. 

Thus  it  appears  that  in  both  the  United  States  and 
Germany  the  development  of  the  utmost  possibilities  of 
cheap  inland  water  communication  is  entitled  to  recogni¬ 
tion  for  having  made  possible  the  upbuilding  of  industries 
which  a  generation  ago  seemed  economically  impossible. 
With  their  great  supplies  of  coal  and  ore  located  very 
close  together,  and  with  ocean  transportation  at  their 
door,  British  manufacturers  seemed  assured  of  a  domina¬ 
tion  in  the  world’s  iron  trade  that  could  only  be  ended 
by  exhaustion  of  their  supplies  of  coal  and  iron.  A  very 
different  situation  has  been  brought  about  largely  because 
of  the  utilisation  of  internal  water  transportation  in  the 
United  States  and  Germany.  .  .  , 


BRITISH  TRANSPORT  AND  AGRICULTURE  85 


Development  of  water  transportation  has  greatly 
reduced  freight  charges,  induced  industrial  and  com¬ 
mercial  development,  and  contributed  vastly  to  pros¬ 
perity  and  wealth. 

So  firmly  is  the  conviction  now  established  that  water¬ 
ways  contribute  to  national  prosperity  that  those 
countries  in  which  the  Government  owns  the  railroads 
are  foremost  in  developing  waterways.  There  is  thus 
afforded  the  curious  spectacle  of  a  group  of  States,  having 
many  billions  invested  in  publicly  owned  railroads,  build¬ 
ing  another  system  of  transportation  to  compete  with 
the  railroads,  and  turning  over  this  competing  system 
to  the  substantially  free  use  of  the  community.  More 
remarkable  still  is  the  universal  testimony  that  this 
policy  has  paid  both  in  increased  railroad  profits  and  in 
added  national  prosperity. 

Great  Britain  is  the  one  exception  among  European 
industrial  countries  to  the  rule  of  encouraging  both  rail 
and  water  transport.  British  railroad  policy  has  aimed 
at  the  suppression  of  waterway  competition,  and  has 
pretty  thoroughly  succeeded.  To-day  the  British  busi¬ 
ness  community  finds  itself  paying  higher  transportation 
tolls  than  continental  countries,  and  because  of  this  fact 
is  at  a  great  and  increasing  disadvantage  in  competitive 
markets. 

Professor  Taussig  of  Harvard  University  described  in 
his  book  Some  Aspects  of  the  Tariff  Question ,  published 
in  1 91 5,  the  difficulty  of  bringing  the  American  coal  and 
iron  ore  together,  and  the  way  by  which  it  was  triumph¬ 
antly  overcome  as  follows : 

Whether  the  ore  goes  to  the  coal  or  the  coal  meets  the 
ore  halfway,  one  or  both  must  travel  a  long  journey,  by 
land  as  well  as  by  water.  One  or  both  must  be  laden 
and  unladen  several  times.  A  carriage  of  800,  900,  over 
1000  miles,  must  be  achieved,  with  two  separate  hauls  by 
rail.  Fifty  years  ago,  even  thirty  years  ago,  it  would 
have  seemed  impossible  to  accomplish  this  on  a  great 
scale  and  with  great  cheapness.  .  .  . 

The  history  of  the  American  iron  trade  after  1870  thus 

7 


86  BRITISH  TRANSPORT  AND  AGRICULTURE 


came  to  be  in  no  small  part  a  history  of  transportation. 
The  perfecting  of  transportation  has  been  almost  the  most 
remarkable  of  the  mechanical  triumphs  of  the  United 
States.  Great  as  have  been  the  evils  of  our  railway 
methods,  disheartening  as  have  been  some  of  the  results 
of  unfettered  competition,  the  efficiency  of  the  railways 
has  been  brought  to  a  point  not  approached  elsewhere 
largely  in  consequence  of  that  very  competition  whose 
ill-effects  have  been  so  often  and  so  justly  dwelt  on.  In 
the  carriage  of  iron  ore  and  of  coal,  the  methods  of  rail¬ 
way  transportation,  which  had  been  developed  under 
the  stress  of  eager  competition,  were  utilised  to  the  utmost ; 
and  the  same  was  true  of  the  transfer  from  rail  to  ship 
and  from  ship  to  rail  again,  of  the  carriage  in  the  ship 
itself,  and  of  the  handling  of  accumulated  piles  of  the  two 
materials. 

The  ore  is  loaded  on  cars  at  the  mines  by  mechanical 
appliances.  At  the  Mesabi  Mines  the  very  steam-shovel 
that  digs  the  ore  from  the  ground  deposits  it  in  the 
adjacent  car.  At  the  lake  high  ore-docks  protrude 
hundreds  of  yards  into  the  water.  On  top  of  them  run 
the  trains,  the  ore  dropping  by  gravity  from  openings  in 
the  car  bottoms  into  the  pockets  of  the  docks.  Thence 
it  drops  again  through  long  ducts  into  the  waiting  vessels, 
ranged  below  alongside  the  dock.  At  every  step  direct 
manual  labour  is  avoided,  and  machines  and  machine¬ 
like  devices  enable  huge  quantities  of  ore  to  be  moved  at 
a  cost  astonishingly  low.  The  vessels  themselves,  con¬ 
structed  for  the  service,  carry  the  maximum  of  cargo  for 
the  minimum  of  expense;  while  the  machinery  for  rapid 
loading  and  unloading  reduces  to  the  shortest  the  non¬ 
earning  time  of  lying  at  the  docks.  At  the  other  end  of 
the  water  carriage,  especially  on  Lake  Erie,  similar  highly 
developed  mechanical  appliances  transfer  from  boat  to 
railway  car  again,  or,  at  will,  to  the  piles  where  stocks 
are  accumulated  for  the  winter  months  of  closed  naviga¬ 
tion.  At  either  end  the  railway  has  been  raised  to  the 
maximum  of  efficiency  for  the  rapid  and  economical 
carriage  of  bulky  freight.  What  has  been  done  for  grain, 
for  cotton,  for  lumber,  for  all  the  great  staples,  has  been 
done  here  also,  and  here,  perhaps,  more  effectively  than 
anywhere  else. 


BRITISH  TRANSPORT  AND  AGRICULTURE  87 


While  the  greatness  and  prosperity  of  the  American 
industries  was  most  powerfully  assisted  by  the  cheapness 
and  efficiency  of  their  inland  transport  system  by  land 
and  by  water,  which  gives  them  the  priceless  boon  of  the 
lowest  freights  in  the  world,  the  British  railways  were, 
with  the  connivance  of  politicians  of  the  laissez  faire 
school,  allowed  to  strangle  the  canals.  They  destroyed 
the  competition  of  the  British  waterways  in  order  to 
obtain  a  monopoly  of  inland  transportation.  Having 
obtained  that  monopoly,  they  proceeded  to  charge 
extortionate  freight  rates,  which  are  seriously  hampering, 
and  which  threaten  to  strangle,  the  productive  industries 
of  the  country.  Owing  to  their  possessing  a  monopoly 
of  transportation  and  owing  to  the  absence  of  effective 
Government  control,  the  British  railways  have  scarcely 
tried  to  increase  their  efficiency.  They  have  continually 
paid  for  so-called  improvements,  which  should  have  been 
made  out  of  earnings,  by  adding  to  their  capital,  and  the 
result  is  that  the  British  railways  have  per  mile  by  far 
the  largest  capital  in  the  world,  and  they  have  found  the 
money  for  paying  increased  wages,  taxes,  prices,  etc.,  by 
vastly  increasing  their  charges  to  the  public,  while  the 
American  railways  have  continually  lowered  theirs.  The 
result  is  that  Great  Britain  has  the  most  expensive,  and 
perhaps  the  least  efficient,  transport  system  in  the  world, 
while  America  has  the  cheapest  and  the  most  efficient. 
Those  who  urged  that  British  railway  transport  should 
be  cheapened  by  greatly  increasing  railway  train-loads, 
by  employing  more  powerful  engines,  etc.,  were  told  that 
this  was  impossible  because  of  the  narrowness  of  the 
British  tunnels  and  of  the  weakness  of  existing  bridges, 
difficulties  which,  of  course,  can  be  overcome,  and  which 
were  overcome  in  the  United  States.  Those  who  urged 
that  scientific  and  uniform  accounting  should  be  intro¬ 
duced  by  the  British  railways,  so  that  the  causes  of  their 


88  BRITISH  TRANSPORT  AND  AGRICULTURE 


inefficiency  could  be  made  clear  and  the  necessary 
remedies  be  adopted,  were  met  with  a  refusal.  The 
British  railway  system  works  with  an  antiquated  and  most 
inefficient  organisation.  Its  reform  is  urgently  needed. 
Its  improvement  and  the  lowering  of  its  charges  should 
have  the  happiest  effect  upon  all  the  national  industries. 
The  revival  of  the  British  industries  will  depend  largely 
on  the  railways.  They  may  stifle  British  production 
unless  they  modernise  their  methods  and  revise  their 
policy  and  their  tariffs. 

It  is  obvious  that  the  American  railways  have  rendered 
invaluable  services  in  opening  up  the  country  and  peopling 
it,  that  they  are  largely  responsible  for  the  wonderful 
development  of  the  natural  resources  of  the  United  States, 
and  for  the  marvellous  expansion  of  the  American 
industries  and  their  abounding  prosperity.  Now  let  us 
summarily  compare  the  railway  position  of  the  British 
Empire  and  of  the  United  States  for  the  year  1913: 


■’*  r  - 

Square  Miles  of 
Territory. 

Population. 

Mileage  of 
Railways. 

British  Empire 

12,808,994 

439,734,060 

134,131 

United  States 

3,026,789 

97,028,497 

251,984 

In  1913  the  area  and  the  population  of  the  British 
Empire  were  considerably  more  than  four  times  as  great 
as  the  area  and  population  of  the  United  States.  Yet 
this  vastly  greater  territory  and  this  vastly  greater 
population  possessed  only  a  little  more  than  half  as  many 
miles  of  railway  as  the  Great  Republic,  notwithstanding 
the  great  industrial  and  financial  start  possessed  by 
England.  That  is  a  very  humiliating  fact.  It  shows 
how  greatly  the  development  of  the  Empire  has  been 


BRITISH  TRANSPORT  AND  AGRICULTURE  89 


neglected.  If  we  bear  in  mind  the  vast  importance  of 
opening  up  new  countries  by  means  of  railways,  it  must 
be  clear  that  the  rapid  increase  of  the  white  population 
and  of  the  wealth  of  the  United  States  is  largely  due  to 
the  extent  and  the  excellence  of  their  railways,  while  the 
comparatively  slow  advance  of  the  British  Empire  in 
white  population  and  wealth  is  largely,  and  perhaps 
principally,  due  to  the  insufficiency  of  its  railway  outfit. 
If  we  wish  to  develop  the  Empire  we  must  before  all 
develop  its  means  of  communication.  The  doubling  and 
quadrupling  of  the  Imperial  railway  mileage  will  un¬ 
doubtedly  double  and  quadruple  the  number  and  the 
wealth  of  the  Empire’s  white  population.  Railways  are 
perhaps  the  Empire’s  greatest  and  most  urgent  need. 

It  is  scarcely  necessary  to  add  that  the  doubling  and 
quadrupling  of  the  Imperial  railway  mileage  will  act  as  a 
most  powerful  stimulant  to  commerce  and  to  many 
manufacturing  industries,  and  especially  to  the  iron  and 
steel  industries,  of  the  United  Kingdom  and  of  the 
Dominions  and  Possessions.  The  American  iron  and 
steel  industry,  by  far  the  greatest  in  the  world,  owes  its 
rise  very  largely  to  the  expansion  of  the  railways.  The 
prosperity  and  population  of  the  British  Empire  may 
obviously  be  vastly  increased  by  a  wise,  daring  and  far¬ 
sighted  railway  policy. 

Convinced  of  the  vast  importance  of  facilitating  and 
cheapening  inland  transport  to  the  utmost,  the  United 
States  Government  and  the  Governments  of  the  indi¬ 
vidual  States  have  spent  vast  amounts  of  public  money, 
not  only  on  improving  the  national  waterways,  but  also 
on  the  roads  of  the  country.  The  public  roads  of  the 
United  States,  which  used  to  be  a  disgrace,  are  rapidly 
being  improved.  In  1914  no  less  than  $249,055,067,  or 
£50,000,000,  of  State  and  local  funds  were  spent  on  their 
improvement  and  construction. 


90  BRITISH  TRANSPORT  AND  AGRICULTURE 


The  Development  of  Agriculture. 

Agriculture  is  the  most  essential  of  all  industries.  The 
United  States  have  vastly  improved  the  national  agri¬ 
culture  in  all  its  branches.  The  prosperity  and  progress 
of  the  American  rural  industries  are  due  partly  to  the 
bounty  of  Nature,  partly  to  the  action  of  the  American 
Government  and  people.  According  to  most  American 
observers,  the  prosperity  of  the  rural  industries  is  largely 
ascribable  to  the  fact  that  the  bulk  of  the  farmland  as 
held  under  the  ownership  system;  that  the  whole  value 
of  the  improvements  made  falls  to  the  farmers  themselves ; 
that  they  work,  not  for  the  landlord,  but  only  for  them¬ 
selves  ;  that  every  farm-labourer  can  hope  to  become  the 
prosperous  owner  of  a  freehold  farm.  In  1910  the  farm¬ 
land  of  the  United  States  was  held  as  follows : 

Per  Cent. 

By  owners  ..  ..  ..  598,554,617  acres  =  68-1 

By  managers  . .  . .  . .  53,730,865  ,,  =  6-1 

By  tenants  . .  . .  . .  226,512,843  ,,  =  25*8 


Total 


878,798,325  „  =100 


In  1910  the  American  farms  were  worked  by  6,259,844 
owners,  376,404  managers,  and  only  618,656  tenants. 
In  the  United  States  there  were  therefore  ten  owners  to 
every  single  tenant  farmer.  In  the  United  Kingdom  the 
reverse  position  unfortunately  obtains.  Farmers  who 
work  for  themselves  naturally  work  with  more  energy 
and  intelligence  than  farmers  who  work  largely  for  a 
landowner,  and  who  know  that  their  improvements  may 
any  moment  be  confiscated.  That  was  pointed  out  by 
Arthur  Young  more  than  a  century  ago. 

The  American  farmers  can  fairly  easily  obtain 
labourers,  partly  because  farm  wages  are  very  high, 
partly  because  drudgery  on  the  farms  has  been  abolished 
by  the  general  use  of  labour-saving  machinery,  partly 


BRITISH  TRANSPORT  AND  AGRICULTURE  91 


because  the  farm-workers  can  easily  acquire  freehold 
land  and  houses  for  themselves,  and  start  farming  on 
their  own  account. 

The  steady  improvement  in  cultivation  effected  may 
be  gauged  from  the  following  figures,  which  are  taken 
from  The  Wealth  and  Income  of  the  People  of  the  United 
States,  published  in  1915  by  Mr.  W.  I.  King,  and  which 
are  based  upon  the  official  statistics : 

Average  Crop  per  Acre. 


Ptriod. 

Corn 

(Maize). 

Wheat. 

Oats. 

Barley. 

Ootton. 

Bushels. 

Bushels. 

Bushels. 

Bushels. 

Bales. 

1866-1875  . . 

26-1 

11-9 

28*1 

22-9 

— 

1876-1885  . . 

25-5 

12-3 

27-6 

22-4 

0-348 

1886-1S95  . . 

23-5 

12-6 

25-6 

22-6 

0-383 

1896-1905.  . . 

25-2 

13-5 

29-6 

25-1 

0-405 

1906-1912  . . 

27-0 

14-5 

29-1 

25-0 

0-394 

The  rural  industries  of  the  United  States  have  prospered 
gieatly,  not  only  because  they  have  been  blessed  with  a 
good  soil  and  climate,  because  the  farmers  enjoy  the 
advantages  of  the  freehold  system,  and  because  they 
enploy  the  best  labour-saving  machinery,  but  also 
because  they  have  been  mightily  helped  by  the  excellent 
American  railways  and  the  cheapness  of  the  freight  which 
tley  charge,  and  because  the  American  Government  has 
vtstly  aided  the  American  agriculturists  by  its  wise  and 
eiergetic  activity.  The  Final  Report  of  the  United 
Spates  Industrial  Commission  of  1902  stated: 

Agriculture  is  the  fundamental,  if  not  the  most  impor¬ 
tant,  industry  of  any  people,  and  should  receive  as  much 
direct  benefit  from  legislation  as  any  other  industry. 
Agriculturists  are  indirectly,  but  nevertheless  vitally, 
interested  in  equitable  tax  laws  and  in  legislation  intended 
to  prevent  monopoly,  either  in  manufacturing  or  in 


92  BRITISH  TRANSPORT  AND  AGRICULTURE 


transportation.  As  consumers  of  manufactures  and 
producers  of  farm  products,  they  are  doubly  affected  by 
unequal  or  exorbitant  freight  charges.  Their  interests 
will  be  best  conserved,  therefore,  by  low  uniform  rates 
for  the  transportation  of  freight  and  by  legislation  which 
will  promote  fair  competition  in  manufactures.  The 
recommendations  of  the  Commissions  on  these  subjects 
and  on  taxation  will  be  found  in  appropriate  places  else¬ 
where  in  this  Report. 

Agriculture  has  derived  more  benefit  from  the  establish¬ 
ment  of  the  Department  of  Agriculture  and  from  its 
administrative  work  than  from  any  other  Federal  legisla¬ 
tion.  The  annual  injury  to  fruit  and  grain  from  the 
ravages  of  insects  would  probably  be  double  what  it  is 
now  but  for  the  work  of  the  Department.  The  distribu¬ 
tion  of  weather  forecasts  has  been  of  incalculable  value  in 
aiding  farmers  to  give  timely  care  to  crops.  Its  experi¬ 
ments  in  proving  the  adaptation  of  crops  to  climates  and 
soils  have  developed  agriculture  into  a  science,  and  thus 
alike  benefited  the  industry  and  the  country  in  general. 

The  United  States  have  a  number  of  excellent  institu¬ 
tions  which  serve  as  intelligence  departments  to  all  the 
economic  interests  of  the  country.  Being  staffed  witl 
the  leading  experts,  being  lavishly  endowed  with  funds 
and  being  administered  and  directed,  not  by  dryasdusi 
bureaucrats,  but  by  enterprising  practical  men  of  business 
they  have  rendered  absolutely  invaluable  services  ii 
promoting  the  prosperity  of  the  people.  Some  of  thes« 
institutions  received  the  following  sums  from  the  Unitec 
States  Government  in  1914: 


Department  of  Agriculture 

•  • 

Dols. 

22,208,141 

Department  of  Commerce 

•  • 

10,958,882 

Department  of  Labour 

•  • 

3,768,904 

Inter-State  Commerce  Commission 
way  Control) 

(Rail- 

•  • 

2,010,696 

Patent  Office  . . 

•  • 

1,460,883 

Geological  Survey 

•  • 

1,368,545 

Census  Bureau  (in  last  census  year  6,419,257 
dels#  j  •  •  •  •  ••  •  •  •  • 

1,220,366 

BRITISH  TRANSPORT  AND  AGRICULTURE  93 


Science  and  research  are  certainly  not  starved  in  the 
United  States  as  they  are  in  the  United  Kingdom.  Not 
only  the  United  States  Government,  but  the  Governments 
of  the  individual  States  also,  maintain  richly  endowed 
departments  of  agriculture,  of  commerce,  of  labour,  of 
railway  control,  etc.,  which  publish  numerous  invaluable 
reports.  In  addition  to  all  these  official  agencies,  there 
are  numerous  powerful  local  and  private  institutions  for 
the  promotion  of  scientific  research,  agriculture,  com¬ 
merce,  etc. 

The  American  Government  has  promoted  agriculture 
also  by  draining  swamps  and  by  irrigating  rainless,  or 
almost  rainless,  lands.  By  vast  irrigation  works  it  has, 
during  recent  years,  reclaimed  2,921,165  acres  of  waterless 
land,  an  area  ten  times  as  large  as  the  county  of  Bedford¬ 
shire,  at  the  cost  of  $106,368,000.  Thus  it  has  converted 
arid  desert  lands  in  the  south  and  west  of  the  country 
into  a  veritable  paradise. 

The  continuous  and  rapid  progress  of  America’s  agri¬ 
culture  may  be  gauged  from  the  following  representative 
and  most  remarkable  figures : 


Production  of — 


Wheat. 

Maize. 

Cotton. 

Wool. 

Beet  Sugar. 

1850 

1860 

1870 

1880 

1890 

1900 

1910 

1914 

Bushels. 

100,485,943 

173,104,924 

235,884,700 

498,549,868 

399,262,000 

522,229,505 

635,121,000 

891,017,000 

Bushels. 

592,071,104 

838,792,740 

1,094,255,000 

1,717,434,543 

1,489,970,000 

2,105,102,516 

2,886,260,000 

2,672,804,000 

Bales. 

2,136,083 

3,841,416 

4,024,527 

6,356,998 

8,562,089 

10,123,027 

11,608,616 

16,102,143 

Lbs. 

52,516,959 

60,264,913 

162,000,000 

232,500,000 

276,000,000 

288,636,621 

321,362,750 

290,192,000 

Lbs. 

None 

None 

896,000 

2,688,006 

4,934,720 

163,458,075 

1,024,938,000 

1,466,802,000 

The  produce  of  many  other  crops  has  increased  at  a 
similarly  rapid  rate. 


94  BRITISH  TRANSPORT  AND  AGRICULTURE 


% 


Exactly  as  the  gigantic  expansion  of  the  American 
railways  would  have  been  impossible  without  the  wonder¬ 
ful  development  of  the  American  iron  and  steel  industries, 
the  mighty  progress  of  agriculture,  indicated  by  these 
figures,  would  have  been  impossible  without  the  extra¬ 
ordinary  development  of  the  American  manufacturing 
industries  in  general,  and  therefore  of  the  towns,  and  of 
the  American  agricultural  implement  industry.  Reapers, 
self-binders  and  other  labour-saving  machines,  many  of 
which  were  invented  by  Americans,  have  revolutionised 
agriculture  throughout  the  world,  and  have  made  possible 
the  agricultural  conquest  of  the  American  West.  The 
production  of  agricultural  implements  in  the  United 
States  has  increased  as  follows : 


Agricultural  Implement  Production. 


In  1850 . . 
In  1860  . . 
In  1870.. 
In  1880  . . 
In  1890  . . 
In  1900 . . 
In  1905  . . 
In  1910  .. 
In  1915.. 


Dols . 
6,843,000 
17,598,000 
52,067,000 
68,640,000 
81,272,000 
101,207,000 
112,007,000 
146,329,000 
164,087,000 


The  Americans  possess  by  far  the  largest  agricultural 
implement  industry  in  the  world.  Its  output  has  in¬ 
creased  twenty-five-fold  since  1850,  and  four- fifths  of  the 
machines  produced  are  retained  in  the  United  States. 
In  1850  the  value  of  the  agricultural  machines  and 
implements  possessed  by  the  American  farmers  came  to 
$151,587,638.  In  1910  their  value  amounted  to 
$1,265,149,783,  having  increased  eightfold.  Without 
that  mighty  increase  in  labour-saving  machinery  the  vast 
augmentation  of  the  American  crops  would,  of  course, 
have  been  impossible. 


BRITISH  TRANSPORT  AND  AGRICULTURE  95 


The  prosperity  of  America’s  agriculture  is  due  not  so 
much  to  the  vastness  of  the  natural  resources  as  to  the 
energy  and  ability  of  the  American  people,  and  particu¬ 
larly  to  the  employment  of  labour-saving  machinery. 
The  Encyclopedia  Britannica  states  under  the  heading 
“  Agriculture  ” : 

Since  1870  the  most  important  factors  in  the  develop¬ 
ment  of  America’s  agriculture  have  been  the  employment 
of  more  scientific  methods  of  production  and  the  more 
extensive  use  of  machinery.  ...  A  really  scientific 
plough  was  practically  unknown  before  1870.  Thirty 
years  later  the  large  farms  of  the  Pacific  States  were 
ploughed,  harrowed  and  sowed  with  wheat  in  a  single 
operation  by  50  horse-power  traction  engines  drawing 
ploughs,  harrows  and  press  drills.  Since  1850  there  has 
been  a  transition  from  the  sickle  and  the  scythe  to  a 
machine  that  in  one  operation  mows,  threshes,  cleans  and 
sacks  the  wheat,  and  in  five  minutes  after  touching  the 
standing  grain  has  it  ready  for  the  market.  Hay-stackers, 
potato  planters  and  diggers,  feed  choppers  and  grinders, 
manure-spreaders,  check-row  corn-planters  and  ditch¬ 
digging  machines  are  some  of  the  common  labour-saving 
devices. 

By  the  28th  of  August,  1907,  the  United  States  Patent 
Office  had  issued  patents  for  13,212  harvesting  machines, 
6,352  threshers,  6,680  harrows  and  diggers,  9,649  seeders 
and  planters,  and  13,171  ploughs.  In  the  manufacture 
of  agricultural  machinery  the  United  States  leads  the 
world.  The  total  value  of  the  implements  and  machinery 
used  by  farmers  of  the  United  States  in  1880  was 
$406,520,055;  in  1890,  $494,247,467;  in  1900,  $761,261,550 
— a  gain  in  this  last  decade  of  54  per  cent.  The  total 
value  of  the  implements  and  machinery  manufactured 
in  1850  was  $6,842,611;  in  1880,  $68,640,486;  in  1890, 
$81,271,651;  in  1900,  $101,207,428.  These  figures,  how¬ 
ever,  are  a  very  poor  indication  of  the  actual  use  of 
machinery,  on  account  of  the  rapid  decrease  in  prices 
following  its  manufacture  on  a  more  extensive  scale  and 
by  improved  methods. 

The  effects  of  the  new  agriculture  are  apparent  from  the 


96  BRITISH  TRANSPORT  AND  AGRICULTURE 


following  figures:  By  the  methods  of  1830  it  required 
64  hours  and  15  minutes  of  man-labour  and  cost  $3.71 
to  produce  an  acre  of  wheat ;  by  the  methods  employed 
in  1896  it  required  2  hours  and  58  minutes  of  man-labour 
and  cost  72  cents.  To  produce  an  acre  of  barley  in  1830 
required  63  hours  of  man-labour  and  cost  $3.59;  in 
1896  it  required  2  hours  and  43  minutes  and  cost  60  cents. 
An  acre  of  oats  produced  by  the  methods  of  1830  required 
66  hours  and  15  minutes  of  man-labour  and  cost  $3.73; 
the  methods  of  1893  required  only  7  hours  and  6  minutes 
and  cost  $1.07.  With  the  same  unit  of  labour  the 
average  quantity  of  all  leading  crops  produced  by  modern 
methods  is  about  five  times  as  great  as  that  produced  by 
the  methods  employed  in  1850,  and  the  cost  of  production 
is  reduced  by  one-half. 

The  Americans  have  revolutionised  agriculture.  With 
the  powerful  machinery  invented,  manufactured  and 
employed  by  them,  the  productive  power  of  the  agri¬ 
cultural  worker  has  in  some  directions  been  increased 
twentyfold  and  more. 

The  expansion  of  America’s  agricultural  production 
has  been  prodigious  and  it  has  been  universal.  It  has 
been  due  to  the  rapid  increase  of  the  population  through 
births  and  immigration,  to  the  possession  of  numerous 
well-managed  railways,  to  cheap  freights,  to  the  increas¬ 
ing  use  of  labour-saving  machinery,  to  the  flourishing 
condition  of  the  American  manufacturing  industries, 
which  provided  agriculture  with  ready  and  opulent 
markets,  to  the  powerful  agricultural  machinery  industry 
and  last,  but  not  least,  to  the  fostering  care  of  the  Ameri¬ 
can  Government  which  protected  and  advanced  the 
agricultural  interests  in  every  possible  way. 

Britain  might,  and  should,  learn  from  America’s 
example.  Unfortunately,  agriculture  has  been  sadly 
neglected,  not  only  in  the  United  Kingdom,  but  in  the 
outlying  parts  of  the  Empire  as  well.  Throughout  the 
Empire  production,  and  especially  agricultural  production. 


BRITISH  TRANSPORT  AND  AGRICULTURE  97 


has  been  largely  disregarded,  while  commerce  and 
speculation  have  been  encouraged.  Throughout  the 
Empire  production,  and  especially  agricultural  produc¬ 
tion,  has  been  sacrificed  to  the  pursuit  of  paper  profits 
and  of  paper  wealth,  and  the  interest  of  the  country  to 
that  of  the  towns.  Although  the  British  Empire  has  an 
area  which  is  more  than  four  times  as  large  as  that  of  the 
United  States,  far  fewer  white  people  are  working  on  the 
land  in  the  Empire  than  in  the  United  States.  Even 
Germany  maintains  within  her  narrow  borders  a  larger 
number  of  white  agriculturists  than  the  whole  of  the 
British  Empire,  although  the  latter  is  eighty  times  as 
extensive  as  the  former.  Agriculture  is  insufficiently 
developed  not  only  in  Great  Britain,  but  also  in  the 
Dominions.  Of  the  population  of  all  Australia,  fully  one- 
third  live  in  the  over-crowded  capitals,  while  half  of  the 
population  of  Victoria  live  in  Melbourne,  and  half  of  the 
population  of  New  South  Wales  in  Sydney.  That  is  an 
unhealthy  and  a  deplorable  state  of  affairs. 

How  grossly  the  agricultural  resources  of  the  United 
Kingdom  have  been  neglected  is  clearly  proved  by  the 
following  most  extraordinary  comparison : 


United  Kingdom. 

Germany. 

Acres. 

Acres. 

Total  area 

..  77,721,256 

133,585,000 

Cultivated  area  . . 

46,931,637 

78,632,139 

Woods  and  forests 

3,069,070 

34,272,841 

Production  in  1912. 

United  Kingdom. 

Germany. 

Tons. 

Tons. 

Wheat  and  rye  . . 

1,568,700 

15,958,900 

Barley 

1,320,400 

3,482,000 

Oats 

2,915,900 

8,520,200 

Potatoes  . . 

5,726,342 

50,209,500 

Hay 

14,024,222 

36,524,915 

98  BRITISH  TRANSPORT  AND  AGRICULTURE 


United  Kingdom . 

Germany. 

Tons. 

Tons. 

Cattle 

11,914,635 

20,182,021 

Cows 

4,400,816 

10,914,283 

Horses 

Not  ascertainable 

4,523,059 

Pigs 

3,992,549 

21,923,707 

Sheep 

28,967,495 

5,803,445 

The  gigantic  difference  in  production  in  Germany’s 
favour  shows  how  vastly  British  agricultural  production 
may  be  increased  to  the  great  advantage  of  the  agri¬ 
cultural  population  of  the  nation  as  a  whole. 

The  feudal  age  is  past.  Feudal  tenure  of  land  is  not 
compatible  with  democracy  and  with  modern  production. 
British  agriculture  should,  without  delay,  be  placed  from 
a  feudal  on  a  freehold  basis  in  the  United  Kingdom  and 
throughout  the  Empire,  and  its  development  should  be 
promoted  by  the  general  fostering  of  production,  by  the 
organisation  of  industry,  by  a  wise  policy  of  migration 
and  rural  settlement,  by  the  provision  of  cheap  transport, 
especially  railways,  and  of  storage  facilities,  etc.,  by  the 
creation  of  cheap  rural  credit,  by  the  provision  of  the  best 
scientific  organisations  and,  if  necessary,  by  the  imposi¬ 
tion  of  protective  tariffs . 

A  Glance  into  the  Future. 

The  development  of  the  latent  resources  of  the  world 
by  labour-saving  machinery  has  only  begun.  The  present 
outfit  of  industries  will  probably  be  completely  out  of 
date  within  a  decade  or  two.  Before  long  electricity  may 
become  the  preponderant  motive  force,  although  coal 
will  remain  indispensable  in  many  industries,  especially 
in  iron-smelting.  The  electric  current  has  many  advan¬ 
tages  over  coal,  and  once  more  the  United  States  may 
revolutionise  the  industrial  methods  of  the  world. 

The  power  of  labour-saving  machinery  employed  in  the 


BRITISH  TRANSPORT  AND  AGRICULTURE  99 


United  States  is  stupendous.  The  horse-powers  used 
were,  according  to  the  Analyst  of  June  8,  1914,  as  follows: 


Horse-Towers . 


Employed  in  manufacturing 
Electric  light  and  power  stations 
Street  and  electric  railways 
Steam  railways 
Mines  and  quarries 
Various 


19,400,000 

7,700,000 

3,400,000 

50,000,000 

5,000,000 

5,400,000 


Total 
Motor  vehicles 


90,900,000 

22,500,000 


Grand  Total 


.  113,400,000 


Of  all  the  horse-powers  used  in  the  United  States, 
about  75,000,000  depend  upon  energy  generated  from 
coal.  According  to  the  present  state  of  geological  know¬ 
ledge,  the  United  States  possess  the  bulk  of  the  world’s 
coal,  as  I  have  shown  in  the  previous  chapter.  The 
Americans  are  a  far-sighted,  active  people.  Although 
they  possess  the  most  gigantic  stores  of  coal  in  the  world, 
they  do  not  wish  to  exhaust  them  prematurely.  They 
mean  to  economise  their  irreplaceable  coal  as  far  as 
possible,  while  Great  Britain  is  exporting  as  much  as 
she  can.  Happily,  the  United  States  possess  an  alter¬ 
native  and  inexhaustible  source  of  power  in  their  numerous 
waterfalls.  In  a  report  written  by  Mr.  M.  O.  Leighton, 
the  Chief  Hydrographer  of  the  United  States  Geological 
Survey,  and  published  in  the  Report  of  the  National 
Conservation  Commission,  we  read: 


It  is  found  that  the  total  power  available  in  the  surveyed 
portions,  including  storage,  is  about  53,000,000  horse¬ 
power.  If  this  be  considered  as  one-fourth,  to  correspond 
with  the  portion  of  the  country  surveyed,  the  total  power 
of  the  country,  with  practical  maximum  storage,  will  be 
about  212,000,000  horse-power. 

The  second  method  of  computation  involves  considera- 


100  BRITISH  TRANSPORT  AND  AGRICULTURE 


tion  of  the  increase  of  power  available  from  storage  in  the 
several  portions  of  the  country  in  which  surveys  have 
been  made,  and  applying  the  ratio  of  increase  to  un¬ 
surveyed  and  similar  country  in  those  regions.  The 
topographical  surveys,  while  they  cover  only  one-fourth 
of  the  total  area  of  the  country,  have  nevertheless  been 
prosecuted  in  all  sections  so  that  the  storage  data  are 
applicable  to  all  physiographic  types  that  are  comprised 
within  the  United  States.  Applying  the  information  in 
this  way,  we  obtain  a  grand  total  of  230,800,000  horse¬ 
power,  which,  it  appears  to  the  writer,  is  a  more  accurate 
figure  than  that  obtained  by  the  first  method. 

In  any  case,  therefore,  it  may  be  assumed  with  confi¬ 
dence  that,  were  all  practicable  storage  sites  utilised  and 
the  water  properly  applied,  there  might  be  established 
eventually  in  the  country  a  total  power  installation  of  at 
least  200,000,000  horse-power,  and  probably  much  more. 

The  United  States  have  in  reserve  a  superabundance 
of  water-power,  and  the  demand  that  inexhaustible 
water-power  should  be  made  to  replace  exhaustible  coal 
is  rapidly  growing,  especially  as  electricity  generated  from 
waterfalls  has  many  advantages  over  coal.  The  Monthly 
Bulletin  of  the  New  York  Chamber  of  Commerce  for 
February,  1918,  contained  a  paper  entitled  “  The  ABC  of 
Water-Power,”  which  stated: 

Two  cubic  feet  of  water,  which  weigh  one  hundred  and 
twenty-five  pounds,  by  falling  a  distance  of  only  six  feet 
will  produce  one  horse-power  of  energy.  Falling  water 
in  early  days  was  used  to  turn  water-wheels  which  pro¬ 
vided  the  necessary  horse-power  to  operate  near-by 
factories,  chiefly  flour  mills.  Now  the  falling  water  is 
guided  by  concrete  penstocks  to  powerful  water  turbines, 
which  whirl  great  electric  generators,  and  the  horse¬ 
power  thus  developed  in  form  of  electric  current  is  trans¬ 
mitted  for  hundreds  of  miles  over  small  copper  wires  to 
cities  and  towns,  where  it  is  used  to  operate  great  manu¬ 
facturing  plants,  run  street  railways,  and  furnish  light 
and  heat.  The  plants  which  produce  electricity  in  this 
way  are  known  as  Hydro-Electric  plants.  .  .  . 


BRITISH  TRANSPORT  AND  AGRICULTURE  101 

Hydro-Electric  plants  cost  more  and  take  longer  to 
instal  than  steam  plants,  but  Hydro-Electric  plants  have 
these  advantages:  the  cost  per  horse-power  of  energy 
produced  is  less,  and  increased  output  does  not  call  for  a 
corresponding  increase  of  fuel  or  labour.  The  amount 
that  is  necessary  to  set  aside  annually  to  cover  charges 
for  depreciation  for  Hydro-Electric  plants  is  estimated  to 
be  not  more  than  one-third  to  one-half  of  that  necessary 
with  a  steam  plant  of  like  capacity.  .  . 

It  is  w^ell  said  that  water-power  is  unlike  most  other 
natural  resources  in  that  it  is  not  diminished  by  use,  nor 
is  it  conserved  by  non-use.  Coal  which  is  not  used  to-day 
remains  to  be  used  hereafter,  but  the  energy  of  water 
which  is  allowed  to  flow  by  unused  neither  decreases  nor 
increases  the  future  supply,  but  is  irretrievably  lost. 
Our  supply  of  coal — the  principal  source  of  energy  — 
while  vast,  is  not  unlimited.  It  is  estimated  that  seven 
to  fourteen  and  even  seventeen  and  one-half  tons  of  coal 
is  consumed  in  producing  one  horse-power.  The  utilisa¬ 
tion  of  water-power  results  in  the  saving  of  this  coal  for 
future  use.  In  other  words,  the  real  waste  of  water¬ 
power  is  its  non-use.  .  .  . 

In  an  article  in  the  Electrical  World  for  June  23,  1917, 
entitled  “  Why  Hydro-Electric  Development  Lags,” 
Hugh  L.  Cooper  treated  statistically  the  release  in  man¬ 
power,  coal  tonnage,  railway  facilities  and  capital  that 
would  result  from  the  utilisation  of  the  water  horse-power 
wasted  in  the  United  States.  He  estimates  that  740,000 
men  would  be  released  for  other  industries  or  for  agri¬ 
culture  if  35,000,000  horse-power  for  one  year  were 
developed  hydro-electrically  instead  of  by  the  equivalent 
process  of  coal  combustion.  Every  50  horse-power 
developed  hydro-electrically  releases  one  man.  The 
change  would  further  effect  a  saving  of  280,000,000  tons 
of  coal  and  600,000  freight  cars  necessary  to  haul  the  coal 
— or  four  times  the  number  needed  to  supply  the  freight- 
car  shortage  of  March,  1917. 

Already  many  important  American  industries,  such  as 
the  agricultural  implement  industry,  the  automobile 
industry,  the  boot  and  shoe  industry,  the  clothing  indus- 

8 


102  BRITISH  TRANSPORT  AND  AGRICULTURE 


try,  the  foundry  and  machine-shop  industry,  and  many 
others,  are  based  mainly  on  electric  power.  Steam- 
power  is  rapidly  being  replaced  by  electric  power.  Before 
long  steam  railways  may  be  as  rare  in  the  United  States 
as  horse  tramways. 

It  should  be  observed  that  the  water-power  of  the 
British  Empire  far  exceeds  that  of  the  United  States. 
The  water-power  of  Canada  alone  is  supposed  to  approxi¬ 
mate,  or  even  to  exceed,  that  of  the  United  States. 

The  facts  and  figures  given  in  these  pages  show  that  the 
United  States  owe  their  wonderful  progress  in  population, 
wealth  and  power  not  to  their  natural  resources — which, 
though  magnificent,  are  probably  inferior  to  those  owned 
by  the  British  Empire — but  to  the  wise  and  energetic 
development  of  their  resources  by  the  American  Govern¬ 
ment  and  people.  The  American  Government  and 
people  have  not  followed  a  cosmopolitan  policy,  but  a 
national  one.  They  have  not  followed  a  policy  of  laissez 
faire,  of  aimless  drift,  favourable  to  the  financier,  the 
speculator,  the  middle-man,  the  exploiter,  nor  a  policy  of 
restriction  with  regard  to  both  population  and  production. 
They  have  followed  a  policy  of  energetic  action  favourable 
to  producton,  which,  after  all,  is  dictated  by  common 
sense.  Hence  they  have  attracted  immigrants  by  all 
means  in  their  power,  and  have  developed  their  magnifi¬ 
cent  natural  resources  to  the  full.  They  have  pursued 
neither  a  short-sighted  policy  recommended  by  economic 
doctrinaires  and  commercial  profit-snatchers,  by  un¬ 
productive  speculators  and  middlemen,  nor  an  equally 
short-sighted  policy  favourable  to  some  clamorous  section 
of  the  inhabitants,  but  ruinous  to  the  nation  as  a  whole. 
They  have  wisely  pursued  a  great  and  truly  national 
policy,  and  have  developed  national  production  as  a  whole 
and  in  all  its  branches.  Thus  the  United  States  have 


BRITISH  TRANSPORT  AND  AGRICULTURE  103 


become  the  largest  producers  among  the  nations  of  the 
world  of  many  valuable  minerals,  such  as  coal,  iron  ore, 
copper,  silver,  zinc,  lead,  sulphur,  petroleum,  and  the 
largest  producers  of  various  forest  productions,  especially 
of  timber.  They  have  become  foremost  among  the 
nations  of  the  world  in  many  agricultural  productions, 
such  as  wheat,  maize,  oats,  tobacco,  cotton,  cattle,  pigs. 
They  have  likewise  become  the  greatest  producers  in  the 
world  of  many  manufactured  articles,  such  as  pig-iron, 
steel,  woollen  goods,  silk  goods,  rubber  goods,  leather, 
boots,  paper,  clothing,  cutlery,  clocks  and  watches,  glass, 
soap,  furniture,  motor-cars,  electrical  machinery,  of 
labour-saving  machines  of  every  kind,  and  possibly  of 
cotton  goods,  and  before  long  they  may  be  the  largest 
shipbuilders  in  the  world  as  well.  England’s  industrial 
paramountcy  is  gone.  The  United  States  have  taken 
their  place.  However,  the  British  race  may  recover 
its  former  great  position  by  energetically  developing  the 
unrivalled  resources  of  the  Empire.  ' 

The  intention  of  the  Americans  to  replace  steam-power 
based  on  coal  by  electrical  energy  based  on  water-power 
shows  the  vastness  of  America’s  industrial  plans  and  the 
greatness  of  America’s  industrial  future.  The  United 
States  know  no  standing  still.  They  are  not  satisfied 
with  the  methods  employed  by  their  grandfathers.  They 
have  no  fossilised  industries,  such  as  may  be  found  in 
Great  Britain.  They  recognise  that  the  essence  of 
industry  is  progress,  is  change.  America’s  future  pro¬ 
gress  in  production  and  in  wealth  will  probably  put  into 
the  shade  her  past  advance.  Man  has  only  begun  to 
enlist  all  the  sciences  in  the  service  of  industry.  The 
British  Empire  is  more  than  four  times  as  large  as  the 
United  States,  and  its  resources  are  more  varied  and  are 
probably  far  greater  than  those  possessed  by  the  Republic 
of  the  West.  If  the  great  Imperial  resources  should  be 


104  BRITISH  TRANSPORT  AND  AGRICULTURE 


developed  with  American  energy,  by  American  methods, 
and  in  accordance  with  the  precedents  set  by  the  Ameri¬ 
can  Government  and  people,  the  wealth  of  the  United 
Kingdom  and  of  the  British  Empire  will  increase  at  an 
incredibly  fast  rate,  and  future  generations  may  be  as 
surprised  at  the  low  cost  of  the  present  War  as  men  living 
now  are  surprised  at  the  low  cost  of  the  British  wars  of 
the  eighteenth  century  and  of  the  twenty  years’  struggle 
with  Napoleonic  France.  Britain’s  present  wealth  may 
seem  to  future  generations  pitiable  poverty.  The  pros¬ 
pects  of  the  British  Empire  are  boundless  if  the  War  be 
brought  to  a  victorious  end,  and  if  the  unfathomable 
latent  wealth  of  the  Empire  be  developed  with  American 
energy  and  wisdom. 


CHAPTER  V 


THE  INEFFICIENCY  OF  BRITISH  INDUSTRIAL 
PRODUCTION— THE  POSSIBILITY  OF 
TREBLING  OUTPUT  * 

The  United  Kingdom  and  the  British  Empire  can  best 
pay  off  the  gigantic  debt  which  is  accumulating  owing  to 
the  War,  and  which  may  grow  to  an  almost  unimaginable 
figure,  by  increasing  production  to  the  utmost  and  by 
developing  with  the  greatest  energy  the  boundless  re¬ 
sources  with  which  Providence  has  endowed  them.  Thus 
Britain’s  wealth  and  national  income  may  be  enlarged 
so  rapidly  and  so  vastly  that  the  cost  of  the  War  may 
seem  as  insignificant  to  future  generations  as  the  cost  of 
the  eighteenth-century  war,  and  even  that  of  the  twenty 
years’  struggle  with  Napoleonic  France,  appears  to  men 
of  the  present  age. 

In  the  previous  chapter  I  have  shown  that  Great  Britain 
and  the  Empire  may  profit  from  America’s  example  by 
developing  rapidly  the  inland  transport  system  and 
agriculture  in  the  United  Kingdom  and  the  whole 
Empire,  and  that  population  and  general  wealth  and 
well-being  of  Motherland  and  daughter-States  may  be 
immeasurably  increased  by  the  policy  of  extending  and 
improving  the  railways  and  canals,  providing  cheap 
transport  and  promoting  the  rural  industries  with  all 
the  means  which  science,  organisation  and  finance  have 
placed  at  man’s  disposal,  a  policy  which  has  been  sadly 
neglected  in  the  past.  In  the  following  pages  I  shall 
endeavour  to  show  that  the  manufacturing  industries, 
which  are  the  principal  resource  of  the  inhabitants  of  the 

*  From  The  Nineteenth  Century  and  After,  November,  1918. 

105 


106  BRITISH  INDUSTRIAL  INEFFICIENCY 


United  Kingdom,  have  been  as  much  neglected  as  the 
British  transport  system  and  British  agriculture,  that 
the  British  industries  also  stand  in  need  of  far-reaching 
reforms,  and  I  shall  show  the  direction  in  which  the 
British  peoples  may  learn  from  the  American  manu¬ 
facturing  industries  and  from  American  manufacturing 
methods  as  well. 

It  is  very  widely  believed  that  the  American  people 
owe  their  enormous  wealth  mainly  to  the  great  extent  of 
their  territory  and  to  the  wonderful,  vast  and  varied 
resources  of  the  soil;  that  the  bulk  of  their  income  is 
derived  from  their  powerful  rural  industries,  their  wealthy 
mines  and  their  extensive  forests.  The  United  States 
have  undoubtedly  been  singularly  blessed  by  Nature. 
Among  the  nations  of  the  world  the  American  people  are 
the  largest  producers  of  wheat,  maize,  oats,  tobacco, 
cotton,  cattle,  pigs,  timber,  coal,  iron  ore,  copper,  silver, 
zinc,  lead,  sulphur,  petroleum,  etc.  Although  the  United 
States  possess  a  world- dominating  position  in  some  of  the 
most  valuable  foodstuffs  and  in  some  of  the  most  precious 
raw  materials,  the  principal  source  of  the  country’s  wealth 
lies,  not  in  its  fields,  forests  and  mines,  but  in  its  factories. 
The  colossal  income  of  the  people,  which  is  at  least  three 
times  as  great  as  that  of  the  inhabitants  of  the  United 
Kingdom,  is  chiefly  won,  not  in  the  vast  expanses  of  their 
plains  and  mountains,  but  within  the  narrow  limits  of 
their  towns.  This  may  be  seen  from  the  following 
official  figures : 


Value  of  Production  in  1909-1910. 


Manufacturing  industries 

Agriculture 

Mining 

Forestry 

Fisheries  (1908) 


Dols. 

20,672,051,870 

8,498,311,413 

1,992,431,412 

684,479,859 

65,567,555 


Total 


. .  31,912,841,209 


BRITISH  INDUSTRIAL  INEFFICIENCY  107 


It  will  be  noticed  that  in  1910  the  productions  of  the 
American  manufacturing  industries  represented  a  value 
which  was  almost  twice  as  great  as  that  of  the  productions 
of  agriculture,  mining,  forestry  and  fishing  combined. 

Many  Englishmen  still  believe  that  Great  Britain  is  the 
greatest  industrial  country  in  the  world.  That  belief, 
which  has  been  fostered  by  party  politicians  and  pseudo- 
economists  of  the  laissez  faire  school,  is  totally  unfounded. 
Until  lately  the  productivity  of  the  British  industries 
was  unknown.  Statesmen,  economists  and  others 
interested  in  economic  facts  had  to  rely  upon  guesswork. 
Many  endeavoured  to  prove  the  supremacy  of  Britain’s 
industries  by  means  of  the  delusive  export  figures.  In 
1907  a  Census  of  Production  for  the  United  Kingdom  was 
taken  for  the  first  time.  Hence  a  fairly  exact  comparison 
can  at  last  be  instituted  between  British  and  American 
industrial  production.  The  age  of  industrial  fiction  is 
gradually  being  replaced  by  that  of  industrial  fact. 

While  the  first  British  Census  of  Production  relates  to 
the  year  1907,  the  eighth  American  Census  of  Production 
— the  first  was  taken  as  early  as  1850 — relates  to  the  year 
1909.  The  interval  of  two  years  between  the  two  Cen¬ 
suses  is  so  small  that  the  result  obtained  may  in  fairness 
be  compared.  Perhaps  it  would  be  best  that  in  the  future 
British  Censuses  would  be  made  to  coincide  in  date  with 
the  American  Censuses.  According  to  the  two  official 
documents,  American  and  British  industrial  production 
was  in  1907  and  1909  as  follows: 


No.  of  Value  of 

Workers.  Products. 


United  States,  private  manufactur¬ 
ing  industries  only,  in  1909  . .  6,615,046 

United  Kingdom,  industries  of  all 
kinds,  including  the  production  of 
public  utilities,  such  as  gas  and 
waterworks,  etc.,  in  1907  . .  6,019,746 


£ 

4,134,412,000 


1,617,340,000 


108  BRITISH  INDUSTRIAL  INEFFICIENCY 


It  will  be  observed  that  the  number  of  workers  in  the 
American  industries  was  only  10  per  cent,  greater  than 
that  of  the  British  industries,  while  the  value  of  their 
productions  was  more  than  two  and  a  half  times  as  great. 
In  other  words,  one  American  industrial  worker  had,  on 
the  broadest  average,  as  great  an  output,  measured  at 
wholesale  prices,  as  had  from  two  to  three  British  workers. 
Some  wholesale  prices  of  manufactured  goods  are  slightly 
higher  in  the  United  States  than  in  England  and  some 
are  slightly  lower.  On  an  average  the  wholesale,  but 
not  the  retail,  price  level  is  almost  identical  in  the  two 
countries.  Hence  exported  American  goods  can,  and  do, 
compete  freely  with  British  goods,  not  only  in  neutral 
markets,  but  in  the  British  home  market  as  well.  The 
higher  price  of  American  goods,  when  bought  retail  in 
the  United  States,  is  due  to  the  greater  cost  of  retailing 
in  that  country,  owing  to  higher  wages  for  shop-assistants, 
etc.  It  follows  that  one  American  worker  produced 
approximately  as  much  as  from  two  to  three  British 
workers.  Probably  the  average  American  worker  pro¬ 
duced  at  least  three  times  as  much,  as  will  presently  be 
shown.  This  superiority  in  individual  production  is  a 
most  interesting  and  most  important  factor  which  will  be 
discussed  farther  on. 

Comparisons  of  the  totals  given  would  seem  to  show 
that  the  industrial  production  of  the  United  States  is 
two  and  a  half  times  as  great  as  that  of  the  United  King¬ 
dom.  In  reality  it  is  considerably  greater.  The  British 
Census  total  sums  up  the  money  value  of  all  industrial 
activities.  It  includes  not  only  all  factory  production, 
but  dwarf  industries,  non-factory  production,  carried  on 
in  shops  and  private  houses,  as  well.  In  addition  it 
includes  the  value  of  houses  built  and  of  house  repairs,  of 
laundry  work  done,  of  railways,  telegraphs  and  tele¬ 
phones  constructed  or  repaired,  of  the  work  done  by  the 


BRITISH  INDUSTRIAL  INEFFICIENCY  109 


productive  national  and  municipal  services  such  as  war¬ 
ship-building  by  the  Government,  municipal  gas  and 
water  works,  etc.,  all  of  which  are  left  out  of  the  American 
total.  Lastly,  it  includes  the  production  of  mines  and 
quarries.  In  giving  the  British  total  for  comparison  with 
the  American  total,  I  have  deducted  the  value  produced 
by  the  mines  and  quarries,  which  is  omitted  from  the 
American  figure,  but  I  have  preserved  the  large  item  of 
public  utilities,  such  as  gasworks,  waterworks,  etc., 
because  some  of  these  services  are  in  private  hands  in  the 
United  States,  and  appear,  therefore,  under  the  heading 
of  Private  Industries  in  the  American  Census.  The 
American  total  sums  up  only  the  production  of  factories 
in  the  accepted  sense  of  the  word.  It  expressly  excludes 
not  only  the  produce  of  the  public  services,  but  also  the 
laundry  industry,  the  important  item  of  house-building 
and  repairing,  and  all  those  non-factory  industries  which 
are  officially  described  in  the  United  States  as  “  Hand 
and  Neighbourhood  Industries.”  The  latter  alone  pro¬ 
duced  in  1900,  when  they  were  specially  accounted  for, 
£318,645,000  worth  of  goods.  If  we  add  to  the  American 
total  this  important  sum  and  deduct  from  the  British 
total  the  large  values  produced  by  the  housebuilders  and 
repairers  and  by  the  productive  undertakings  of  the 
State  and  of  the  municipalities,  and  the  various  other  items 
which  do  not  appear  in  the  American  total,  it  will  be 
clear  that  in  1907-1909  the  manufacturing  industries  of 
the  United  States  produced  at  least  three  times  as  much 
as  the  manufacturing  industries  of  the  United  Kingdom, 
and  that  all  the  industrial  activities  of  the  United 
States  produced  likewise  at  least  three  times  as  much 
as  all  the  industrial  activities  of  the  British  Isles. 
The  fact  that  American  industrial  production  was  in 
1907-1909  at  least  three  times  as  great  as  British  in¬ 
dustrial  production  cannot  be  gainsaid.  Britain  has 


110  BRITISH  INDUSTRIAL  INEFFICIENCY 


lost  her  former  industrial  supremacy  to  the  United 
States. 

In  the  British  and  in  the  American  Censuses  of  Pro¬ 
duction  the  numerous  industries  for  which  statistics  are 
given  are  divided  into  a  few  large  groups.  Let  us  now 
compare  the  British  and  American  industries  by  groups. 
As  the  grouping  has  not  been  absolutely  identical  in  the 
two  countries,  some  rearrangement  was  necessary  to 
make  the  results  fairly  comparable.  The  rearrangement 
effected  yields  the  following  comparative  and  comparable 
data : 


British  and  American  Industrial  Production  in 

1907-1909. 


Manufacture  of  food,  drink,  and 
tobacco 

Iron  and  steel  and  their  products, 
inclusive  of  land  vehicles,  rail¬ 
way  vehicles,  railway  repair 
shops,  shipbuilding,  agricultural 
and  electrical  machinery,  etc. 
Textiles  and  clothing 
Timber  and  Woodworking  Trades 
Leather  and  Leather  goods 
Paper  and  printing 
Chemicals  . . 

Stone,  clay  and  glass  (exclusive  of 
building  and  repairing) 
Productions  of  metal,  exclusive  of 
iron  and  steel  . . 

Various 


United  States 

United  King¬ 

in  1909. 

dom  in  1907. 

£ 

£ 

1,020,219,000 

197,734,000 

924,704,000 

375,196,000 

612,398,000 

441,554,000 

337,655,000 

46,390,000 

198,543,000 

34,928,000 

235,857,000 

61,308,000 

305,320,000 

75,032,000 

106,347,000 

29,608,000 

248,082,000 

93,465,000 

280,138,000 

34,564,000 

While  the  production  of  the  textile  and  clothing  trades 
was  40  per  cent,  greater  in  the  United  States  than  in  the 
United  Kingdom,  that  of  the  American  iron  and  steel 
industries  was  nearly  two  and  a  half  times  as  great  as 
that  of  the  British.  The  production  of  the  other  metal 
industries  was  more  than  two  and  a  half  times  as  great  in 


BRITISH  INDUSTRIAL  INEFFICIENCY  1 1 1 


America  as  in  the  United  Kingdom;  that  of  the  stone, 
clay  and  glass- working  industries  was  more  than  three 
and  a  half  times  as  great ;  and  that  of  paper  and  printing 
nearly  four  times  as  great.  The  output  of  chemicals  in 
America  exceeded  that  of  the  United  Kingdom  more  than 
four  times,  and  that  of  manufactured  food,  drink  and 
tobacco  more  than  five  times.  That  of  leather  and 
leather  goods  was  more  than  five  and  a  half  times,  that 
of  the  wood-’working  industries  was  seven  times,  and  that 
of  the  not  classified  industries  more  than  eight  times  as 
great  in  the  United  States  as  in  Great  Britain.  In  giving 
the  total  of  the  stone,  clay  and  glass- working  industries, 
I  have  deducted  from  the  British  figures  the  value  of 
building  and  repairing,  as  corresponding  figures  are  not 
included  in  the  American  total.  I  have  not  been  able 
to  obtain  the  American  building  and  repairing  totals, 
but  only  the  cost  of  the  American  buildings  raised  in  the 
fifty-one  principal  cities .  Their  value  compared  as  follows 
with  that  of  the  buildings  erected  in  the  whole  of  the 
United  Kingdom: 

Value  of  buildings  raised  in  fifty-one  principal  £ 

United  States  cities  only  in  1909  . .  . .  . .  154,187,000 

Value  of  buildings  raised  in  the  whole  of  the  United 

Kingdom  in  1907  . .  . .  . .  . .  . .  39,378,000 

The  value  of  American  buildings  constructed  in  the 
fifty-one  great  towns  alone  was  nearly  four  times  as  large 
as  that  of  the  British  buildings  erected  in  the  whole  of  the 
United  Kingdom.  If  figures  were  available  for  the 
whole  of  the  United  States,  the  value  of  the  American 
building  operations  would  probably  be  at  least  five  times 
as  great  as  that  of  the  British  building  operations.  It  is 
worth  noting  that  New  York  and  Brooklyn  alone  con¬ 
structed  in  1909  buildings  to  the  value  of  £50,063,000,  a 
figure  which  exceeds  that  for  the  whole  of  the  United 
Kingdom  by  more  than  25  per  cent. 


112  BRITISH  INDUSTRIAL  INEFFICIENCY 


The  superiority  in  production  possessed  by  the  great 
American  industries  over  the  British  industries  is  obviously 
overwhelming.  This  impression  is  strengthened  by  com¬ 
paring  a  few  representative  individual  industries  of  the 
two  countries  : 


United 
States 
in  1909. 

United 
Kingdom 
in  1907. 

Superiority. 

Shipbuilding  and  re¬ 
pairing  exclusive  of 
warships  . . 

£ 

14,672,000 

£ 

41,039,000 

British  3-fold 

Cotton  goods 

125,678,000 

132,000,000 

no/ 

»>  °  /o 

Dyeing  and  finishing 
textiles 

16,711,000 

18,000,000 

8°/ 

>*  °  /o 

Brewing  and  malting 

82,616,000 

67,254,000 

American  25% 

Soap  and  candles  . . 

22,898,000 

12,707,000 

,,  2  -  fold 

Cocoa,  chocolate  and 
confectionery 

31,437,000 

16,171,000 

,,  2  ,, 

Matches 

2,271,000 

862,000 

,,  2|  ,, 

Paint,  colours  and 
varnish 

24,978,000 

9,127,000 

»>  2£  ,, 

Railway  carriages  and 
waggons  . . 

24,746,000 

9,850,000 

»,  2£  ,, 

Pens  and  pencils 

2,539,000 

791,000 

,»  ^  >> 

Hats  and  caps 

16,598,000 

5,256,000 

»,  3  ,, 

Clothing 

190,566,000 

62,169,000 

,,  3  ,, 

Glass  and  glassware 

18,419,000 

4,899,000 

,>  31  ,, 

Cement 

12,641,000 

3,621,000 

»>  31  ,, 

Leather  tanning  and 
dressing 

65,575,000 

18,289,000 

,»  3£  ,, 

Paper 

53,531,000 

13,621,000 

j»  4  >> 

Gloves 

4,726,000 

1,056,000 

41  ,, 

Hosiery 

40,029,000 

8,792,000 

41  ,, 

Boots  and  shoes 

102,359,000 

20,095,000 

„  5  „ 

Cutlery  and  tools  . . 

10,653,000 

2,047,000 

„  5  „ 

Cardboard  boxes 

10,970,000 

2,067,000 

„  5i  „ 

Wooden  furniture  . . 

43,207,000 

7,684,000 

„  5£  „ 

Butter  and  cheese  . . 

54,911,000 

10,164,000 

„  5i  „ 

Fertilisers 

20,794,000 

3,552,000 

„  6 

Silk  goods 

39,382,000 

5,345,000 

,»  71  ,, 

Pianos,  organs,  etc. . . 
Firearms  and  Am¬ 
munition  . . 

17,957,000 

1,865,000 

94  ,, 

6,822,000 

677,000 

„  10  „ 

Clocks  and  watches. . 

7,039,000 

613,000 

„  111  » 

Motor-cars  . . 

49,840,000 

3,585,000 

„  H  „ 

BRITISH  INDUSTRIAL  INEFFICIENCY  1 1 3 


The  advocates  of  the  policy  of  laissez  faire  frequently 
assert  that  Great  Britain  is  the  foremost  industrial 
nation  in  the  world.  They  habitually  “  prove  ”  that 
reckless  assertion  by  pointing  to  the  figures  of  England’s 
foreign  trade  and  to  England’s  supremacy  in  ship¬ 
building  and  the  cotton  industry.  In  the  table  given  all 
the  individual  industries  are  included  for  which  com¬ 
parative  data  of  output  are  available.  They  show  that 
in  1907-1909  the  output  of  the  British  shipbuilding 
industry  was  three  times  as  great  as  that  of  the  American 
shipbuilders.  Unfortunately,  it  seems  likely  that  Eng¬ 
land’s  paramountcy  in  shipbuilding  may  be  transferred 
to  the  United  States  in  consequence  of  the  War.  Besides, 
the  shipbuilding  industry  is  not  as  important  as  is 
generally  believed.  Measured  by  value,  it  represents 
only  one-fortieth  of  England’s  industrial  production. 
The  yearly  output  of  the  cotton  industry  is  more  than 
three  times  as  valuable  as  that  of  shipbuilding.  In  the 
cotton  industry  English  production  had  in  1907-1909  an 
advantage  of  nearly  5  per  cent,  over  the  United  States, 
while  the  British  dyeing  and  finishing  of  textiles  had  an 
advantage  of  nearly  8  per  cent.  In  these  two  industries 
England’s  superiority  was  infinitesimal,  and  had  probably 
disappeared  before  the  War.  In  brewing  and  malting 
the  Americans  were  only  25  per  cent,  ahead  of  the  British, 
but  in  all  the  other  industries  enumerated  America’s 
superiority  over  the  United  Kingdom  was  very  great, 
ranging  from  twofold  in  the  case  of  soap  and  candles, 
cocoa,  chocolate  and  confectionery,  in  the  making  of 
which  little  skill  is  required,  to  a  fivefold  American 
superiority  in  boots  and  shoes,  cutlery,  furniture,  etc.,  to 
a  more  than  sevenfold  superiority  in  silk  manufactures 
to  a  more  than  ninefold  superiority  in  pianos  and  organs, 
and  to  a  fourteenfold  superiority  in  motor-cars.  It  is 
significant  that,  shipbuilding  excepted,  England’s  in- 


114  BRITISH  INDUSTRIAL  INEFFICIENCY 


dustrial  position  is  strongest  in  those  industries  which 
are  carried  on  by  the  cheapest  ,  and  largely  by  female  and 
juvenile,  labour,  and  that  America’s  superiority  is 
greatest  in  those  industries  which  require  the  highest 
degree  of  scientific  organisation,  the  most  perfect  and  the 
most  powerful  machinery,  and  the  greatest  technical 
skill.  '  Cud 

Now  let  us  study  the  progress  of  some  American 
industries  since  1850,  the  year  when  the  first  Industrial 
Census  was  taken : 


Year. 

- 

United  States 
Population. 

Number  of 
Wage- 
Earners. 

Value  of  all 

Industrial 

Products. 

1850 

23,191,876 

957,059 

Dole. 

1,019,106,616 

1914-1915 

98,646,491 

7,036,337 

24,246,434,724 

Between  1850  and  1914-1915  the  population  of  the 
United  States  increased  fourfold,  the  number  of  industrial 
wage-earners  sevenfold,  and  the  value  of  their  industrial 
productions  no  less  than  twenty-four-fold.  During  the 
period  under  consideration  the  value  of  output  increased 
three  and  a  half  times  as  fast  as  the  number  of  the  workers. 
In  other  words,  the  average  production  per  worker, 
measured  by  value,  was  in  1915  three  and  a  half  times  as 
great  as  it  was  in  1850.  However,  as  the  prices  of  most 
manufactured  goods  have  been  greatly  reduced  since 
1850,  the  quantity  of  goods  produced  per  worker  has 
increased  considerably  more  than  three  and  a  half-fold, 
notwithstanding  the  great  shortening  of  working  hours. 
Mechanical  progress  has  evidently  more  than  quadrupled 
the  productive  power  of  the  average  American  factory 
worker  since  the  middle  of  the  last  century. 


BRITISH  INDUSTRIAL  INEFFICIENCY  115 


It  is  very  interesting  to  follow  the  development  of  some 
of  the  American  industries  in  detail. 


Production  of — 


Year. 

Pig-Iron. 

Cotton  Goods. 

Woollen 

Goods. 

Silk  Goods. 

Tons. 

Dols. 

Dols. 

Dols. 

1850  .. 

563,755 

61,869,184 

48,608,779 

1,809,476 

1860  .. 

821,223 

115,681,774 

73,454,000 

6,607,771 

1870  .. 

1,665,179 

177,489,739 

199,257,262 

12,210,662 

1880  .. 

3,835,191 

192,090,110 

238,085,686 

41,033,045 

1890  .. 

9,202,703 

267,981,724 

270,527,511 

87,298,454 

1900  .. 

13,789,242 

339,200,320 

296,990,494 

107,256,258 

1910  .. 

27,303,567 

628,391,813 

507,166,710 

196,911,677 

1915  .. 

30,966,152* 

701,301,000 

464,249,813 

254,011,000 

Since  1850  the  production  of  woollen  goods  has  in¬ 
creased  tenfold,  that  of  cotton  goods  eleven  and  a  half¬ 
fold,  that  of  pig-iron  fifty-five-fold  and  that  of  silk  goods 
one  hundred  and  fifty-fold.  In  1850  American  produc¬ 
tion  in  all  these  was  quite  insignificant  compared  with 
British  production.  Now  the  United  States  are  by  far 
the  largest  producers  in  the  world  of  iron  and  steel  and 
of  the  goods  made  from  them,  of  woollen  goods  and  silk 
goods,  and  very  likely  their  cotton  industry  has  by  now 
overtaken  that  of  Great  Britain  as  well. 

In  1846  England  introduced  Free  Trade.  Mr.  Cobden 
had  assured  his  political  and  industrial  opponents  and  all 
those  who  doubted  the  wisdom  of  that  policy  that  Eng¬ 
land’s  industrial  supremacy  was  unchallenged  and  un- 
challengable ;  that  England  “was,  and  always  would 
remain,  the  workshop  of  the  world.”  At  that  time 
England  mined  two-thirds  of  the  world’s  coal,  produced 

*  The  figures  for  1913  have  been  given,  as  the  War  made 
American  iron  production  temporarily  abnormal. 


116  BRITISH  INDUSTRIAL  INEFFICIENCY 


two-thirds  of  the  world’s  iron,  worked  up  two-thirds  of 
the  world’s  cotton,  possessed  two-thirds  of  the  world’s 
shipping,  etc.  Since  then  England  has  lost  her  industrial 
paramountcy,  which  she  had  acquired  under  the  most 
rigid  form  of  Protection,  and  the  United  States  have 
taken  her  place  as  the  world’s  principal  and  most 
prosperous  manufacturer.  During  the  Free  Trade  period 
some  British  industries  have  prospered  and  progressed, 
and  others,  such  as  agriculture,  the  silk  industry,  etc., 
have  declined  and  decayed.  Progress  is  a  term  of  com¬ 
parison.  Progress  is  not  absolute,  but  is  relative.  Com¬ 
pared  with  the  tremendous  industrial  advance  made  by 
the  manufacturing  industries  of  the  United  States  since 
1850  under  high  Protection,  that  of  the  British  industries 
on  the  whole  made  during  the  same  time  under  Free 
Trade  is  quite  insignificant. 

Before  1850  the  Americans  were  a  nation  of  frugal 
farmers.  Since  then  they  have  become  the  greatest  and 
the  richest  industrial  nation  in  the  world.  How  pro¬ 
foundly  social  conditions  and  the  life  of  the  people  have 
been  affected  by  this  change  may  be  gauged  from  the 
following  figures: 


Production  of — 


Year. 

Men's 

Clothing. 

Women's 

Clothing. 

Furniture. 

Dots. 

Dots. 

Dots. 

1850  .. 

48,312,000 

T 

17,663,000 

1860  .. 

80,831,000 

7,181,000 

25,632,000 

1870  .. 

148,660,000 

12,901,000 

68,522,000 

1880  . . 

209,548,000 

32,005,000 

77,846,000 

1890  .. 

251,020,000 

68,164,000 

111,743,000 

1900  .. 

276,717,000 

159,340,000 

125,316,000 

1905  .. 

355,797,000 

247,662,000 

170,447,000 

1910  . . 

485,677,000 

384,752,000 

229,197,000 

1915  .. 

458,211,000 

473,888,000 

265,706,000 

i 


BRITISH  INDUSTRIAL  INEFFICIENCY  117 


Year. 

Bread  and 
Bakery 
Products. 

Confec¬ 

tionery. 

Beer. 

Cigars  and 
Cigarettes. 

Dots. 

Dots. 

Dots. 

Dots. 

1850  .. 

13,294,000 

3,041,000 

5,729,000 

f 

1860  .. 

16,980,000 

5,361,000 

21,311,000 

9,069,000 

1870  .. 

36,908,000 

15,923,000 

55,707,000 

33,374,000 

1880  .. 

65,825,000 

25,637,000 

101,058,000 

63,980,000 

1890  .. 

128,422,000 

55,997,000 

182,732,000 

129,693,000 

1900  .. 

175,369,000 

60,644,000 

236,915,000 

159,959,000 

1905  .. 

269,583,000 

87,087,000 

298,346,000 

214,344,000 

1910  .. 

396,865,000 

134,796,000 

374,730,000 

260,088,000 

1915  .. 

491,893,000 

170,845,000 

442,149,000 

314,884,000 

Between  1850  and  1915  the  production  of  men’s 
clothes  has  increased  more  than  ninefold,  but  between 
1860  and  1915 — there  are  no  figures  for  1850 — the  pro¬ 
duction  of  women’s  clothes  increased  more  than  sixty- 
five-fold.  In  1860  the  industrial  output  of  women’s 
clothes  was  less  than  one-tenth  that  of  men’s  clothes. 
Women  evidently  wore  chiefly  garments  made  at  home. 
In  1915  the  American  women  were  no  longer  dressed  in 
home-made  clothes,  for  the  industrial  production  of 
women’s  clothes  had  overtaken  that  of  men’s  clothes. 
In  1850  the  industrial  production  of  bread  and  bakery 
products  was  quite  insignificant.  The  thrifty  American 
housewives  not  only  made  their  own  clothes,  but  baked 
their  own  bread.  Since  then  the  industrial  production 
of  bread,  etc.,  has  increased  nearly  fortyfold. 

The  vast  increase  in  the  opulence  of  the  American 
people  and  the  change  which  the  rapid  increase  of  wealth 
has  effected  in  the  lives  and  habits  of  the  people  can  be 
seen,  furthermore,  from  the  production  of  furniture, 
which  between  1850  and  1915  has  grown  fifteenfold. 
Cigars  and  cigarettes  have  taken  the  place  of  the  cheap 
and  popular  pipe.  While  the  production  of  smoking 

tobacco  has  increased  eight  and  a  half-fold  since  I860, 

9 


118  BRITISH  INDUSTRIAL  INEFFICIENCY 


that  of  cigars  and  cigarettes  has  grown  no  less  than 
thirty-five-fold  during  the  same  period,  and  the  value  of 
cigars  and  cigarettes  consumed  is  nowr  double  that  of 
smoking  tobacco.  Since  1850  the  production  of  con¬ 
fectionery  has  increased  fifty-seven-fold,  and  that  of  beer 
no  less  than  seventy-eight-fold.  Of  course,  in  the  middle 
of  last  century  a  good  many  American  housewives  not 
only  baked  their  bread  and  made  their  own  clothes,  but 
brewed  their  husband’s  beer. 

The  facts  and  figures  supplied  in  these  pages  prove  that 
Great  Britain  is  no  longer  the  workshop  of  the  world; 
that  the  American  manufacturing  industries,  which,  in 
1850,  were  quite  insignificant  if  compared  with  those  of 
Great  Britain,  have  advanced  at  so  extraordinarily  rapid 
a  rate  that  their  combined  output  is  now  three  times  as 
great  as  that  of  all  the  British  industries;  that  Great 
Britain  has  lost  her  former  manufacturing  supremacy  in 
all  industries,  except  a  few,  and  that  the  paramountcy 
even  of  these  few  has  become  exceedingly  precarious. 
Naturally  it  will  be  asked:  Why  have  the  American 
manufacturing  industries  expanded  so  rapidly  as  to 
overtake,  and  to  outpace  completely,  the  old-established, 
powerful  and  wealthy  industries  of  Great  Britain  ? 

The  cause  of  America’s  wonderful  industrial  advance 
is  not  to  be  found  in  the  great  natural  resources  of  the 
United  States,  for  natural  resources,  however  great,  do 
not  exploit  themselves,  but  are  exploited  by  men.  The 
United  States  owe  their  industrial  supremacy  to  the 
energetic  activity  of  the  American  Government  and 
people.  America’s  manufacturing  success  is  due  mainly 
to  two  reasons :  to  the  technical  policy  pursued  by  both 
employers  and  employed,  and  to  the  economic  policy 
pursued  by  the  American  Government  and  people. 

In  the  opening  pages  of  this  paper  I  have  shown,  by 
comparing  the  entire  industrial  production  of  the  United 


BRITISH  INDUSTRIAL  INEFFICIENCY  119 


States  and  of  Great  Britain  and  the  number  of  industrial 
workers  employed  in  the  two  countries,  that  in  1907-1909 
production  per  worker  was  approximately  three  times  as 
great  in  the  United  States  as  in  the  United  Kingdom. 
That  fact  seems  so  extraordinary  and  so  incredible  that  it 
seems  necessary  to  establish  its  correctness  by  a  more 
detailed  investigation.  Unfortunately,  the  British  and 
American  industries  have  been  differently  classified  in 
the  Censuses  of  Production.  Hence  one  has  to  rely 
for  comparison  on  those  industries  for  which  comparable 
statistical  data  are  available.  In  these  comparable 
industries  production  per  wage-earner  was  in  1907-1909 
as  follows  (see  p.  120): 

The  gross  output  per  worker  per  year  gives  the  value  of 
the  average  worker’s  yearly  production  at  wholesale 
prices.  It  includes,  therefore,  not  only  the  value  of  his 
personal  work,  but  also  the  value  of  the  various  materials 
used  by  him  in  manufacturing  and  the  general  expenses 
of  the  factory,  such  as  rent,  taxes,  depreciation,  etc.  We 
can  easily  ascertain  the  net  output  of  the  workers  by 
deducting  from  the  value  of  their  gross  product  the  value 
of  the  materials  which  they  have  used  in  manufacturing 
and  the  general  factory  expenses,  for  which  items  data 
are  furnished  by  the  Censuses.  The  net  output  figures 
resulting  from  this  reduction  give  the  value  of  the  work 
which  the  workers  have  actually  done,  as  the  cost  of  the 
raw  materials  used  and  the  factory  expenses  have  been 
eliminated.  The  cost  of  raw  materials  used  in  manu¬ 
facturing  and  general  factory  expenses  differ  in  the 
United  States  and  Great  Britain.  Hence  we  can  best 
ascertain  the  efficiency  of  production  and  of  labour  in  the 
two  countries  by  comparing  the  net  output  figures  per 
worker. 

A  glance  at  the  table  given  shows  that  both  the  gross 
and  the  net  output  per  worker  was  very  nearly  three 


1 20  BRITISH  INDUSTRIAL  INEFFICIENCY 


Gross  Output  per 
W orker  per  Year. 

Net  Output  per  Worker 
per  Week. 

• 

United 
States 
in  1909. 

United 
Kingdom 
in  1907. 

United 
States 
in  1909. 

United 
Kingdom 
in  1907. 

£ 

£ 

£ 

s. 

d. 

£ 

s. 

d. 

Boots  and  shoes 

516 

171 

3 

10 

0 

1 

7 

4 

Cardboard  boxes  .  . 

275 

106 

2 

15 

0 

1 

0 

0 

Butter  and  cheese 

2,979 

1,310 

8 

3 

0 

2 

8 

1 

Cement 

472 

192 

4 

17 

8 

2 

10 

10 

Clothing 

484 

158 

4 

7 

4 

1 

3 

11 

Cocoa,  chocolate  and 
confectionery 

662 

296 

4 

18 

5 

1 

12 

3 

Cotton  goods 

332 

236 

2 

13 

9 

1 

10 

6 

Clocks  and  watches 

296 

137 

4 

3 

0 

1 

7 

9 

Cutlery  and  tools  . . 

323 

164 

4 

1 

6 

1 

8 

1 

Dyeing  and  finish¬ 
ing  textiles 

379 

184 

4 

4 

3 

1 

18 

11 

Gas  works  . . 

897 

422 

11 

16 

7 

4 

1 

1 

Firearms  and  am¬ 
munition 

464 

152 

4 

9 

2 

2 

2 

8 

Gloves 

416 

233 

3 

10 

9 

1 

11 

2 

Hats  and  caps 

414 

149 

4 

1 

10 

1 

5 

10 

Hosiery 

309 

184 

2 

2 

8 

1 

3 

5 

Leather  tanning  and 
dressing  . . 

1,054 

686 

4 

13 

1 

2 

5 

0 

Lime 

258 

141 

3 

2 

4 

1 

13 

5 

Brewing  and  malting 

6,209 

937 

19 

10 

5 

6 

7 

3 

Matches 

1,729 

.  408 

7 

3 

1 

1 

13 

0 

Paint,  colours,  and 
varnish  . . 

4,012 

1,375 

12 

9 

3 

3 

16 

2 

Paper 

15,846 

4,201 

5 

3 

5 

2 

2 

8 

Pens  and  pencils  . . 

710 

241 

4 

5 

9 

1 

9 

8 

Printing,  and  pub¬ 
lishing 

1,154 

1,133 

7 

16 

11 

3 

13 

1 

Railway  vehicles  . . 

2,274 

1,127 

4 

0 

5 

2 

7 

5 

Silk  goods  . . 

989 

608 

3 

9 

3 

1 

1 

2 

Soap  and  candles  . . 

2,160 

1,092 

11 

7 

8 

1  2 

19 

8 

Average  per  head 
for  all  the  indus¬ 
tries  enumerated 

1,747 

617 

5 

17 

7 

2 

3 

1 

BRITISH  INDUSTRIAL  INEFFICIENCY  121 


times  as  great  in  the  United  States  as  in  Great  Britain. 
The  gross  output  per  average  worker  per  year  for  all  the 
twenty-six  industries  enumerated  was  in  1907-1909 
£1,747  in  the  United  States  and  only  £617  in  Great 
Britain.  The  net  output  per  worker  per  week  for  all 
these  twenty-six  industries  was  £5  17s.  7d.  in  the  United 
States  and  only  £2  3s.  Id.  in  Great  Britain.  That  is  a 
tremendous  difference  which  shows  that  the  United  States 
are  far  ahead  of  Great  Britain  in  manufacturing  efficiency. 
It  shows  that  the  American  industries  have  overtaken 
the  British  not  so  much  owing  to  the  superiority  of 
America’s  natural  resources  as  owing  to  the  superiority 
of  American  manufacturing  methods. 

The  table  contains  all  the  industries  for  which  com¬ 
parable  data  can  be  extracted  from  the  British  and 
American  Censuses  of  Production.  It  has  not  been 
compiled  with  the  intention  of  making  out  a  case,  and  it 
is  to  be  regretted  that  some  of  the  most  efficient  American 
industries,  such  as  the  iron  and  steel  industries,  the 
machinery  trades,  etc.,  had  to  be  omitted.  Their  in¬ 
clusion  would  undoubtedly  have  considerably  increased 
the  superiority  of  the  output  of  the  average  American 
worker  over  the  output  of  the  average  British  worker. 

Wages  depend  obviously  upon  net  output.  In  fact, 
they  are  paid  out  of  net  output.  As  the  manufacturer 
has  to  find  the  money  for  the  materials  used  and  for  the 
general  expenses  of  his  factory,  the  net  output  of  his 
workers  creates  the  fund  which  is  divided  between 
employer  and  employed.  It  furnishes  both  the  manu¬ 
facturer’s  profits  and  the  worker’s  wages.  Before  the 
War  British  labour  leaders  frequently  asserted  that  the 
relative  lowness  of  British  wages  was  due  to  defective 
distribution,  to  the  greed  of  the  capitalists.  The  last 
column  of  the  table  establishes  that  before  the  War 
British  wages  were  low  because  of  the  low  value  of  net 


122 


BRITISH  INDUSTRIAL  INEFFICIENCY 


production  per  worker.  As  no  factory  can  be  run  at  a 
loss  for  a  prolonged  period,  no  worker  can  hope  to  earn 
in  wages  more  than  the  net  value  of  his  work,  and  if  the 
net  value  of  his  labour  comes  on  an  average  only  to  about 
£2  per  week,  he  cannot  hope  to  earn  more  than  that  sum, 
even  if  the  manufacturers  should  be  willing  to  work 
without  profits.  Even  the  advent  of  the  Socialist 
millennium  cannot  extract  high  wages  out  of  a  low  net 
production  per  worker.  Before  the  War  American  wages 
were  on  an  average  about  three  times  as  high  as  were 
British  wages  simply  because  actual  net  production  per 
worker  was  about  three  times  as  great  in  the  United 
States  as  in  Great  Britain.  According  to  official  records 
the  following  wages,  were  currently  paid  on  May  1,  1914, 
in  some  representative  occupations  in  Chicago  where  good 
average  wages  rule : 


Dots. 

£ 

8. 

d. 

Baker’s  foreman,  day  work  . . 

20 

=  4 

0 

0 

,,  ,,  night  work 

22 

=  4 

8 

0 

,,  secondliands,  day  work 

18 

=  3 

12 

0 

,,  ,,  night  work 

20 

=  4 

0 

0 

Bricklayers 

33 

=  6 

12 

0 

Carpenters 

28-60 

=  5 

14 

5 

Builder’s  labourers 

17-60 

=  3 

10 

5 

Boiler -makers,  manufacturing  shops 

21-60 

=  4 

6 

5 

,,  outside 

27-50 

=  5 

10 

0 

Moulders 

24 

=  4 

16 

0 

Compositors,  English  . . 

24 

=  4 

16 

0 

The  fact  that  before  the  War  production  per  worker 
was  on  an  average  three  times  as  great  in  the  United 
States  as  in  Great  Britain  is  clearly  established  by  the 
official  figures  given.  It  cannot  be  denied.  However, 
as,  generally  speaking,  the  American  workers  work  fewer 
hours  per  week  than  the  British  workers — there  are,  of 
course,  some  exceptions — the  superiority  of  the  American 
output  per  worker  per  hour  is  even  greater  than  that 


BRITISH  INDUSTRIAL  INEFFICIENCY  123 


shown  by  the  figures,  which  relate  to  their  output  per 
year  and  per  week. 

Why  was  in  1907-1909  an  American  worker  able  to  do 
as  much  work  as  three  English  workers  engaged  in  the 
identical  callings  ? 

A  worker’s  output  depends  upon  several  factors. 
Among  these  the  following  two  are  particularly  important : 
the  type  of  machinery  used  and  the  power  by  which  that 
machinery  is  driven.  It  is  generally  known  that  the 
United  States  are  far  ahead  of  Great  Britain  in  the  use 
of  labour-saving  machinery  of  the  most  perfect  type. 
However,  in  addition  to  better  machinery  the  American 
industries  use  far  greater  engine-power  with  which  to 
keep  their  machines  in  motion.  This  may  be  seen  from 
the  following  comparative  figures : 


Horse-Power  used  in  the  Twenty-Six  Trades  previously 

ENUMERATED. 


No.  of 
Workers. 

Horse-Power 

used. 

Horse-Power 
per  Thousand 
Workers. 

United  States 

1,982,777 

4,779,225 

2,409 

United  Kingdom 

1,699,572 

2,009,354 

1,182 

The  startling  inferiority  of  England’s  industrial  output 
per  worker  is  due  partly  to  the  indifference  to  progress 
and  to  the  conservatism  of  the  employers;  partly,  and 
probably  principally,  to  the  hostility  of  the  British  trade 
unions  to  mechanical  improvements  and  to  their 
pernicious  policy  of  restricting  output  by  all  means  in  their 
power.  In  organisation,  and  especially  in  mechanical 
efficiency,  the  British  industries,  which  formerly  stood 
first  in  the  world,  are  now  far  behind  their  American 
competitors.  Many  competent  American  observers  have 


124  BRITISH  INDUSTRIAL  INEFFICIENCY 


pointed  out  to  their  countrymen  the  unwisdom  of  the 
policy  of  antagonising  machinery  and  restricting  output 
which  has  been  pursued  by  the  British  trade  unions, 
holding  them  up  as  a  warning  example.  In  the  final 
Report  of  the  American  Industrial  Commission  of  1902 
we  read : 

That  the  tendency  of  working-men  is  to  restrict  the 
output  of  their  labour  within  more  or  less  definite  limits, 
which  they  have  come  to  consider  right  and  just,  is 
undeniable.  .  .  .  The  trade  unions  of  Great  Britain,  for 
instance,  have  always  been  relatively  stronger  than  those 
of  America,  and  at  the  same  time  the  tendency  to  fix 
definite  limitations  to  the  performance  of  each  workman 
has  been  stronger  there.  One  standard  contrast  between 
industrial  conditions  in  Great  Britain  and  in  the  United 
States  is  the  greater  freedom  of  the  American  workman 
from  restrictive  rules.  To  it  is  often  attributed,  in  a 
large  degree,  his  greater  activity  and  effectiveness.  The 
alleged  decline  of  British  industry  is  often  laid  at  the  door 
of  the  unions,  by  reason  of  their  limitation  of  the  product 
of  their  members. 

.  .  .  There  can  be  little  doubt  that  in  the  long  run  the 
interests  of  all  classes  will  best  be  promoted  by  making 
the  aggregate  production  of  wealth  as  great  as  possible, 
so  long  as  the  workmen  are  not  crowded  beyond  their 
strength.  Certainly  any  general  attempt  to  reduce  the 
efficiency  of  American  labour  will  check  the  progress  of 
our  industries,  and  will  hamper  us  in  competition  with  the 
other  great  ‘producing  nations.  The  high  productivity 
of  our  industries  at  the  present  time  is  in  part  due  to  the 
superior  methods  and  machinery  used,  but  also  in  no 
small  degree  to  the  greater  energy  and  skill,  of  the  Ameri¬ 
can  labourer.  That  high  degree  of  energy  and  skill  is  the 
cause,  at  least  in  part,  of  the  higher  wages  which  American 
working-men  usually  receive. 

The  Report  “  Regulation  and  Restriction  of  Output,” 
published  by  the  United  States  Commissioner  of  Labour 
in  1904,  stated: 


BRITISH  INDUSTRIAL  INEFFICIENCY  125 


Perhaps  the  most  significant  fact  brought  about  by  this 
investigation  is  the  striking  difference  between  .  .  . 
Great  Britain  and  the  United  States.  ...  In  Great 
Britain  the  justification  of  vested  rights  is  avowed,  and 
shows  itself  strongly  in  the  dislike  of  capitalists  to  discard 
old  and  out-of-date  machinery  and  methods  of  business, 
and  in  the  obstacles  placed  by  unionists  in  the  way  of 
machinery  and  division  of  labour  which  tend  to  eliminate 
their  acquired  skill.  .  .  . 

One  can  readily  understand  how  difficult  it  is  to  make 
any  change  whatever  in  the  English  engineering  industry. 
Each  party  knows  exactly  what  it  is  getting  when  working 
on  traditional  lines  with  traditional  machinery  and  old 
methods.  The  working-man  is  afraid  that  if  any  change, 
however  slight,  is  made,  his  pay  per  unit  of  effort  will  be 
lowered.  On  the  other  hand,  the  employer  is  afraid  that 
any  proposed  change  of  whatever  nature  will  result  in 
friction  and  controversy  with  his  workmen'.  He  fears 
that,  should  he  reorganise  his  shop  with  expensive  and 
more  modern  machinery,  his  employees  would  either 
refuse  to  work  the  new  machines,  or,  not  being  familiar 
with  the  power  of  the  machinery,  would  demand  a  rate 
of  pay  which  would  more  than  absorb  the  profits  from  its 
use,  or,  suspecting  that  they  were  not  getting  a  sufficient 
rate  of  pay  on  the  machine,  would  restrict  the  output  so 
as  to  make  the  venture  unprofitable. 

The  Report  on  Cotton  Manufactures,  published  by  the 
United  States  Tariff  Board  in  1912,  said: 

In  the  case  of  plain  looms  (not  automatic)  the  English 
weaver  seldom  tends  more  than  four  looms,  while  in  this 
country  a  weaver  rarely  tends  less  than  six,  and  more 
frequently  eight,  or  even  twelve,  if  equipped  with  “  warp- 
stop  motions.”  Furthermore,  English  manufacturers 
make  little  use  of  automatic  looms,  of  which  there  were 
less  than  6,000  in  May,  1911,  in  the  whole  of  England, 
while  in  the  United  States  there  are  well  over  200,000. 
It  is  estimated  that  there  are  now  about  10,000  of  these 
looms  in  use  in  England,  and  about  15,000  on  the  Con¬ 
tinent.  Where  automatic  looms  can  be  used,  a  single 


126  BRITISH  INDUSTRIAL  INEFFICIENCY 


weaver  commonly  tends  twenty  looms,  and  sometimes 
as  many  as  twenty-eight.  .  .  . 

Several  reasons  are  advanced  for  the  delay  in  the  more 
general  adoption  of  the  automatic  loom  in  England.  For 
one  thing,  the  automatic  loom  costs  about  two  and  a  half 
times  the  ordinary  plain  loom,  and  this  has  deterred  many 
English  mills  already  equipped  with  plain  looms  from 
adopting  them.  .  .  .  An  additional  reason  for  the 
limited  use  of  the  automatic  looms  appears  to  be  the 
objection  to  them  of  the  labour  unions,  which  have  been 
afraid  that  they  would  be  used  to  displace  labour  and  to 
throw  more  work  on  the  weaver  without  proportionately 
increasing  his  earnings. 

Professor  Taussig  of  Harvard  University  wrote  in  his 
excellent  book  Some  Aspects  of  the  Tariff  Question ,  pub¬ 
lished  in  1915: 

Whatever  be  one’s  sympathy  with  labour  organisations, 
it  is  not  to  be  denied  that  a  well-entrenched  union  tends 
to  oppose  the  introduction  of  labour-saving  devices.  This 
attitude  is  the  inevitable  consequence  of  the  dependence 
of  laborers  on  hire  by  capitalist  employers.  The  first 
effect  of  a  new  machine  or  a  better  rearrangement  is  to 
displace  some  labourers  or  to  lower  their  pay.  Moreover, 
the  belief  in  “  making  work  ”  is  too  deep-rooted  to  permit 
the  installation  of  improved  processes  without  strong 
though  silent  opposition.  The  mere  existence  of  a  power¬ 
ful  union — one  not  to  be  fought  without  heavy  loss — has 
a  benumbing  influence,  checking  the  very  consideration 
of  radical  changes  and  tending  to  keep  industry  in  its 
established  grooves.  Such  was  and  is  the  influence  of  the 
strong  organisation  of  the  British  iron-workers  (the 
engineers);  it  led  to  struggles  and  strikes,  in  which  the 
union,  though  sometimes  beaten,  retained  a  strong 
position.  The  American  iron-makers,  themselves  men  of 
overmastering  temperament,  and  engaged  in  an  industry 
where  changes  were  rapid,  shook  loose  from  this  sort  of 
control.  Beyond  doubt,  they  were  induced  to  adopt  a 
drastic  non-union  policy  by  another  circumstance : 
infraction  of  discipline  by  the  union  men  and  their 


BRITISH  INDUSTRIAL  INEFFICIENCY  127 


opposition  to  discharge  of  the  insubordinate  and  incom¬ 
petent.  .  .  .  All  in  all,  the  defeat  of  the  union  move¬ 
ment  served  to  make  the  iron  industry  more  free  and 
more  vigorous,  so  far  as  concerns  the  advance  of  pro¬ 
ductive  power  and  the  cheapening  of  the  products.  .  .  . 

In  the  Welsh  tinplate  industry  the  union  long  en¬ 
couraged,  and  the  workmen  maintained,  the  policy  of  re¬ 
stricting  output;  and  they  opposed  labour-saving  devices. 
It  would  seem  clear  that  the  employers  also,  established 
as  they  had  long  been  in  apparently  secure  possession  of 
the  tinplate  trade,  fell  into  a  certain  stolid  conservatism. 
Something  like  stagnation  set  in.  .  .  . 

Even  for  ordinary  looms  the  English  weavers  oppose 
rearrangements  and  reductions  in  piece  rates  when 
improvements  make  it  possible  for  a  weaver  to  operate 
with  the  same  effort  and  attention  a  larger  number  of 
looms.  Hence,  as  was  noted  a  moment  ago,  the  effective¬ 
ness  of  labour  is  less  in  England,  even  where  power  looms 
of  the  same  general  type  as  in  the  United  States  are  used. 
This  difficulty  is  accentuated  by  the  attitude  of  the 
English  weavers  toward  the  automatic  loom.  The 
weavers  are  afraid  of  the  new  device ;  it  threatens  to  make 
employment  less.  They  are  not  disposed  to  work  the 
looms  to  their  maximum  output ;  they  are  loth  to  accept 
reduced  piece-work  rates,  even  though  they  can  earn  as 
much,  even  more.  It  is  the  familiar  and  almost  inevitable 
disposition  to  “make  work,”  the  hostility  to  labour-saving 
appliances.  It  may  not  take  the  form  of  overt  and 
unqualified  refusal,  but  it  leads  to  a  silent,  stolid  oppo¬ 
sition.  Against  this  the  employer  cannot  make  headway 
without  friction  and  loss,  especially  when  his  power  of 
discharge  and  his  ability  to  insist  on  the  full  productivity 
of  machinery  are  hampered  by  a  strong  labour  union. 

Mr.  F.  W.  Taylor,  the  eminent  American  engineer,  who 
is  revolutionising  industry  by  his  methods  of  organisation 
based  on  the  minutest  time-study  and  motion  study, 
wrote  in  his  book  Shop- Management: 

There  is  no  question  that  the  greater  the  daily  output 
of  the  average  individual  in  a  trade,  the  greater  will  be 


128  BRITISH  INDUSTRIAL  INEFFICIENCY 


the  average  wages  earned  in  the  trade,  and  that  in  the 
long  run  turning  out  a  large  amount  of  work  each  day  will 
give  them  higher  wages,  steadier  and  more  work,  instead 
of  throwing  them  out  of  work.  The  worst  thing  that  a 
labor  union  can  do  for  its  members  in  the  long  run  is  to 
limit  the  amount  of  work  which  they  allow  each  workman 
to  do  in  a  day.  .  .  . 

Forbidding  their  members  to  do  more  than  a  given 
amount  of  work  in  a  day  has  been  the  greatest  mistake 
made  by  the  English  trade  unions.  The  whole  of  that 
country  is  suffering  more  or  less  from  this  error  now. 
Their  workmen  are  for  this  reason  receiving  lower  wages 
than  they  might  get,  and  in  many  cases  the  men,  under 
the  influence  of  this  idea,  have  grown  so  slow  that  they 
would  find  it  difficult  to  do  a  good  day’s  work  even  if 
public  opinion  encouraged  them  in  it.  .  .  .  Any  scheme 
which  curtails  the  output  should  be  recognised  as  a  device 
for  lowering  wages  in  the  long  run. 

Shortly  before  the  War  Mr.  Taylor  told  me  in  a  most 
interesting  letter: 

Years  ago  I  arrived  at  the  conclusion  that  under¬ 
production  was  the  most  serious  problem  which  England 
had  to  face,  and  in  my  lectures  in  this  country  I  have 
almost  invariably  spoken  of  this,  pointing  out  the  fact 
that  the  English  people  — including  their  political  leaders 
and  the  leaders  of  the  trade  unions — were,  as  we  put  it, 
“  barking  up  the  wrong  tree  ”  in  their  effort  to  amelio¬ 
rate  the  condition  of  the  working-men. 

No  amount  of  readjustment  of  the  joint  reward  of 
labour  and  capital  can  make  the  English  working-men 
materially  better  off.  Their  only  hope  lies  in  an  increase 
in  individual  output  throughout  the  country. 

I  know  case  after  case  in  England  where  they  use 
exactly  the  same  machines  as  in  this  country,  but  at  far 
less  horse-power  and  at  far  less  speed  than  they  should  be 
run,  and  in  a  manner  so  as  to  turn  out  nothing  like  half 
the  work  that  is  being  turned  out  in  this  country;  and  this 
is  due,  not  to  the  lack  of  proper  machinery,  but  to  the 
almost  unalterable  determination  of  every  workman  in 


BRITISH  INDUSTRIAL  INEFFICIENCY  129 


England  to  turn  out  as  little  work  as  possible  each  day 
in  return  for  the  money  which  he  receives.  This  with  the 
English  workmen  is  almost  a  religion. 

In  1882,  when  I  was  a  foreman  in  the  machine-shop  of 
the  Midvale  Steel  Company,  I  first  became  thoroughly 
convinced  of  this  fact.  At  that  time  the  steel  business 
in  this  country  was  comparatively  in  its  infancy,  and  it 
was  impossible  for  us  to  get  skilled  American  workmen  to 
carry  on  the  steel  business.  There  was  at  that  time  quite 
a  large  English  immigration  of  skilled  steel-workers  in 
this  country,  and  we  had  to  depend  for  some  time  upon 
these  men  to  do  our  work.  At  that  time  there  were  no 
trade  unions  in  the  steel  business  to  speak  of  in  this 
country  (at  least,  they  were  not  powerful).  In  spite  of 
this  fact,  however,  I  soon  found  that  every  English  work¬ 
man  was  doing  everything  in  his  power,  first,  to  restrict 
his  own  output,  and  second,  to  induce  every  other  work¬ 
man  around  him  to  restrict  output  to  the  maximum 
possible  extent. 

After  one  or  two  years  of  unremitting,  kindly  effort,  I 
found  that  it  was  absolutely  impossible  to  persuade  the 
English  workmen  that  it  was  to  their  interest  to  turn  out  a 
proper  day’s  work ,  or  even  to  stop  them  in  their  campaign 
of  persuading  and  bulldozing  American  workmen  into 
adopting  their  theories  as  to  the  necessity  for  restricting 
output.  As  a  result  of  this  we  were  compelled,  in  our 
steelworks,  to  absolutely  make  it  a  rule  never  to  employ 
English  workmen.  From  this  time  forward,  even  with 
unskilled  American  stock,  we  were  able  to  make  extremely 
rapid  progress.  Our  workmen  had  not  yet  been  inocu¬ 
lated  with  this  terribly  pernicious  fallacy  that  restriction 
of  output  was  a  necessity  for  the  prosperity  of  the  work¬ 
man. 

To  illustrate  the  restriction  of  output,  we  had  in  our 
works  a  locomotive  and  car-wheel  tyre  rolling  machine, 
which  was  bought  from  Tangye  Brothers  in  England,  and 
all  the  apparatus  connected  with  this  machine  came  from 
England.  We  had  a  splendid  set  of  English  workmen — 
that  is,  they  were  fine  fellows,  and  were  very  skilled 
workers  and  personally  not  lazy  or  shiftless — to  run  this 
machine.  And  yet,  after  working  at  it  for  three  or  four 
years,  they  refused  to  turn  out  more  than  fifteen  tyres 


130  BRITISH  INDUSTRIAL  INEFFICIENCY 


per  day.  We  called  their  attention  over  and  over  again 
to  the  fact  that  at  this  rate  of  production  we  were  making 
no  profit  whatever;  that  it  was  absolutely  necessary  to 
increase  the  production  of  this  machine.  All  of  our 
persuasion  and  all  of  our  talk  was  of  no  avail  whatever 
and  we  were  finally  obliged  to  discharge  the  whole  lot 
of  them,  to  get  every  man  outside  of  the  works,  and 
ourselves  to  train  in  an  entirely  new  and  green  set  of 
American  workmen,  who  had  never  seen  a  machine  of 
this  sort.  Within  three  months  after  training  them  in, 
we  had  increased  the  output  from  fifteen  to  twenty- five 
tyres  a  day,  and  this  output  went  on,  right  on  the  same 
machine,  increasing,  until,  three  or  four  years  later,  we 
had  an  output  of  150  tyres  a  day. 

The  great  obstacle  which  you  have  to  overcome  in 
England  is  not  the  unwillingness  of  the  manufacturers  to 
use  modem  machinery,  but  the  unwillingness  of  your 
workmen  to  properly  use  modern  machinery  after  it  is 
installed. 

Mr.  Samuel  Gompers,  the  head  of  the  United  States 
Federation  of  Labour,  stated  on  June  17,  1917,  according 
to  the  Observer  of  J uly  8 : 

W e  are  not  going  to  have  the  trouble  here  that  Britain 
had  with  restriction  of  production.  There  has  not  been 
any  restriction  of  output  for  over  thirty  years  in  America. 
We  in  the  United  States  have  followed  an  entirely  different 
policy.  We  say  to  the  employers:  “Bring  in  all  the 
improved  machinery  and  new  tools  that  you  can  find.  We 
will  help  to  improve  them  still  further,  and  we  will  get 
the  utmost  product  out  of  them,  but  what  we  insist  on  is 
the  limitation  of  the  hours  of  labour  for  the  individual 
to  eight  per  day.” 

Even  after  the  outbreak  of  War,  when  munitions,  etc., 
were  most  urgently  wanted,  many  British  trade  unions 
strove  to  continue  limiting  output  in  the  traditional 
manner,  partly  by  refusing  to  abandon  their  policy  of 
“  going  slow,”  partly  by  opposing  the  admission  of  out¬ 
siders  to  their  trades,  of  which  they  wished  to  preserve 


BRITISH  INDUSTRIAL  INEFFICIENCY  131 


the  monopoly.  Their  opposition  to  increasing  production 
to  the  utmost  by  speeding  up  production  by  means  of 
improved  machinery,  by  allowing  existing  machinery  to 
be  run  at  full  speed,  etc.,  and  their  opposition  to  augment¬ 
ing  the  number  of  workers  by  what  is  called  “  dilution,” 
has  continued  in  many  directions  up  to  the  present  day. 
For  instance,  The  Times  of  April  17,  1918,  contained  a 
letter  from  an  English  shipping  man,  dated  New  York* 
which  stated : 

A  great  many  new  yards  have  come  into  existence  on 
this  side  recently.  .  .  .  When  these  yards  get  into 
proper  swing,  they  will  no  doubt  turn  out  tonnage  equal 
to  the  worst  submarine  sinkings.  The  question  of 
unskilled  labour  does  not  affect  the  people  on  this  side 
as  it  does  in  England,  as,  not  being  hampered  by  trade 
unionism,  they  can  turn  a  man  out  a  riveter,  caulker, 
or  any  other  branch  of  the  trade  within  ten  days. 
Practically  everything  is  done  with  machinery,  and  hand¬ 
riveting  is  a  thing  of  the  past. 

While  the  British  Labour  leaders  and  workers  have 
deliberately  kept  production  low  by  opposing  the  intro¬ 
duction  of  the  most  perfect  labour-saving  machinery  — 
a  policy  which,  to  some  extent,  was  also  pursued  by  those 
short-sighted  and  unprogressive  manufacturers  who 
wished  to  preserve  the  methods  of  their  grandfathers  — 
the  American  manufacturers  and  their  workers  have 
consistently  striven  to  increase  production  to  the  utmost 
by  using  the  most  modern  and  the  most  powerful 
machinery  and  the  most  modern  methods.  The  policy 
of  high  production  has  given  very  large  wages  to  the 
indifferently  organised  workers  in  the  United  States, 
while  the  policy  of  limiting  output  has  given  wages  one- 
third  as  high  as  American  wages  to  the  strongly  organised 
members  of  the  powerful  British  trade  unions.  The 
progressive  American  policy  of  high  production,  adopted 


132  BRITISH  INDUSTRIAL  INEFFICIENCY 


by  employers  and  employed  alike,  has  enriched  masters 
and  men.  The  British  policy  of  hostility  to  progress, 
the  deliberate  wasting  of  time  and  labour,  has  kept  the 
workers  poor,  and  it  would  ultimately  have  ruined  the 
industries  and  the  country.  The  War  may  have  saved 
the  situation,  by  waking  up  masters  and  men  to  their 
danger. 

The  abounding  prosperity  of  the  American  manu¬ 
facturing  trades  is  due  not  only  to  the  industrial  policy 
of  unceasing  progress  and  of  intensive  production,  pursued 
single-heartedly  by  the  employers  and  their  workers,  but 
also  to  the  economic  policy  adopted  by  the  American 
Government  and  the  American  people.  While  successive 
English  Governments  have  discouraged  production  by 
favouring  the  policy  of  laissez  faire,  the  policy  of  one¬ 
sided  free  imports,  which  is  usually  miscalled  Free  Trade, 
successive  American  Governments  and  the  American 
people  have  encouraged  their  home  industries  to  the 
utmost  by  the  policy  of  Protection.  British  Free  Traders 
base,  as  a  rule,  their  objection  to  Protection  upon  the 
argument  that  Protection  creates  general  dearness,  that 
it  is  a  device  for  benefiting  the  rich  at  the  cost  of  the  poor, 
that  it  creates  Trusts,  that  it  causes  industrial  inefficiency, 
etc.  These  objections,  which  may  be  found  in  the  text¬ 
books  of  British  Political  Economy,  may  appear  correct 
in  theory — unfortunately  British  Political  Economy  is 
mainly  occupied  in  spinning  economic  theories  while 
disregarding  economic  facts — but  they  are  contradicted 
by  the  experience  of  the  United  States.  The  ill-organised 
American  workers  receive  under  Protection  wages  which 
are  about  three  times  as  high  as  are  British  wages,  while 
the  cost  of  living  to  the  workers  is  only  slightly  higher 
in  the  United  States  than  in  Great  Britain. 

Trusts  are  not  created  by  the  tariff,  but  they  have 
arisen  because  modern  industry  naturally  tends  towards 


BRITISH  INDUSTRIAL  INEFFICIENCY  133 


aggregation  and  concentration,  because  production  is 
cheapest  when  it  is  most  efficient,  and  because  it  is, 
as  a  rule,  most  efficient  when  it  is  carried  on  on  the 
largest  possible  scale.  Then  only  can  organisation  and 
mechanical  outfit  be  brought  to  the  highest  degree  of 
perfection. 

The  fact  that  protected  industries,  and  even  tariff 
protected  Trusts,  do  not  necessarily  raise  prices  against 
the  consumers,  but  frequently  lower  them  as  much  as 
possible  in  order  to  preserve  their  pre-eminence  by 
superior  cheapness  based  on  efficiency,  may  be  seen  by 
the  price-history  of  iron  and  petroleum  in  the  United  f 
States,  both  of  which  are  highly  protected,  and  both  of 
which  are  handled  by  the  most  powerful  Trusts  in  the 
world,  the  United  States  Steel  Corporation  and  the 
Standard  Oil  Trust.  During  the  last  fifty  years  the  prices 
of  steel  rails  and  of  refined  petroleum  have  been  as  follows : 


Year. 

Price  of  Steel 
Rails  jper  Ton. 

Price  of  Refined 
Petroleum  per  Gallon 
in  New  York. 

1863 

Pols. 

? 

Cents. 

43f 

1873 

120.58 

18* 

1883 

37.75 

8* 

1893 

28.12 

5.24 

1903 

28.00 

8.62 

1913 

28.00 

6.30 

Steel  rails  and  petroleum  and  the  productions  of  many 
other  tariff-protected  industries  organised  in  Trusts  have 
become  steadily  cheaper.  In  many  years  American  steel 
rails  were  cheaper  than  British  steel  rails.  The  argument 
that  Protection  makes  commodities  dear  and  creates 
Trusts  which  charge  outrageous  prices  is  clearly  disproved 
by  the  American  price  movements. 


10 


134  BRITISH  INDUSTRIAL  INEFFICIENCY 


The  argument  that  Protection  enervates  industry, 
destroys  enterprise,  and  encourages  inefficiency  in  the 
protected  trades  is  likewise  disproved  by  the  experience 
of  the^United  States  and  by  that  of  Germany.  Professor 
Taussig  of  Harvard  University,  who  for  many  years 
favoured  Free  Trade,  wrote  in  his  judicious  and  non¬ 
partisan  book  Some  Aspects  of  the  Tariff  Question: 

It  is  certain  that  since  the  adoption  of  the  protective 
system  by  the  German  Empire  in  1879  there  has  been  an 
extraordinary  advance  in  all  the  technique  and  organisa¬ 
tion  of  manufacturing  industry.  ...  In  general  it  is  as 
certain  in  the  case  of  the  United  States  as  in  that  of 
Germany  that  the  march  of  technical  improvement  has 
been  extraordinarily  rapid  during  the  period  of  the 
maintenance  of  a  high  protective  system.  .  .  .  All  the 
general  indications  from  the  economic  history  of  the 
United  States  are  that  protective  duties  in  the  great 
majority  of  cases  have  not  served  to  bolster  up  anti¬ 
quated  establishments  or  to  retard  improvements. 

It  is  a  significant  fact  that  before  the  War  industries 
were  most  efficient  in  the  highly  protected  United  States 
and  in  Germany,  and  exceedingly  inefficient  in  Free 
Trade  Great  Britain.  That  fact  should  give  food  for 
thought  to  the  champions  of  Free  Trade. 

Protective  tariffs  undoubtedly  encourage  industry,  and 
as  prosperous,  powerful  and  progressive  industries  tend 
towards  concentration,  it  may  perhaps  be  said  that  Pro¬ 
tection  favours  manufacturing  on  the  largest  scale  and 
therefore  favours  Trusts.  However,  it  is  better  for  a 
nation  and  its  workers  to  be  highly  prosperous  and  to 
complain  about  Trusts,  as  many  Americans  do,  than  to 
suffer  from  stagnant,  declining  and  decaying  industries 
and  to  rejoice  at  the  absence  of  Trusts.  After  all,  the 
Trust  is  the  most  perfect  form  of  individual  organisation, 
and  the  abuse  of  its  power  can,  and  ought  to,  be  con¬ 
trolled  by  the  Government.  It  is  worth  pointing  out 


BRITISH  INDUSTRIAL  INEFFICIENCY  135 


that  in  England,  as  in  the  United  States,  the  most  success¬ 
ful  industries  are  carried  on  by  huge  Trusts,  such  as  the 
Coats  Thread  Combination  and  the  all-embracing  Imperial 
Tobacco  Company. 

Protection  reserves  the  home  market  to  the  national 
industries,  gives  them  a  considerable  measure  of  security, 
and  therefore  favours  industrial  enterprise,  especially  on 
a  large  scale.  While  the  policy  of  Free  Trade  has  caused 
British  industries  to  develop  spasmodically,  and  has 
caused  British  manufacturing  to  be  carried  on  inefficiently 
and  wastefully  in  numerous  small  and  medium-sized 
factories,  the  policy  of  giving  security  to  the  domestic 
industries  adopted  by  the  United  States  has  favoured  the 
concentration  of  the  American  industries  and  the  rise  of 
gigantic  undertakings.  The  superior  efficiency  of  enter¬ 
prises  carried  on  on  the  largest  scale  may  be  seen  from 
the  following  figures  extracted  from  the  American 
Censuses  of  Production: 


Production  of  Industrial  Establishments  having  a  Yearly 

Output  of  $1,000,000  and  More. 


Year. 

No.  of 

W age -Earners 
Employed. 

Percentage 
of  All 
Workers. 

Value  of 
Productions. 

Percentage  of 
All  Industrial 
Production. 

1904 

1909  . . 

1914  . . 

1,400,453 

2,015,629 

2,476,006 

Per  Cent. 
25-6 

30-5 

35-2 

Pols. 

5,628,456,171 

9,053,580,393 

11,794,060,929 

Per  Cent. 
38-0 

43-8 

48-6 

These 

figures  are 

intensely 

interesting 

and  extra- 

ordinarily  important.  In  1914  the  largest  industrial 
undertakings  of  the  United  States  had  together  an  output 
of  £2,354,812,186,  which  was  considerably  larger  than 
that  of  all  the  industries  of  the  United  Kingdom  combined. 


136  BRITISH  INDUSTRIAL  INEFFICIENCY 


These  large  undertakings  more  than  doubled  their  output 
during  the  decade  1904-1914.  The  most  remarkable 
fact,  however,  is  that  whereas  the  giant  concerns  employed 
only  35-2  per  cent,  of  all  the  industrial  workers,  they 
produced  no  less  than  48*6  per  cent,  of  all  the  goods  made 
in  the  United  States,  while  the  American  industrial 
establishments  of  a  smaller  type  employed  64-8  per  cent, 
of  the  workers  and  produced  with  them  only  51-4  per 
cent,  of  all  the  industrial  goods  made.  These  figures 
summarise  in  the  briefest  manner  and  prove  absolutely 
the  superior  efficiency  of  production  on  the  largest  scale 
over  production  on  a  medium  or  a  small  scale.  America’s 
greatest  industrial  triumphs  have  been  won  by  its  most 
gigantic  undertakings.  The  United  States  Steel  Corpora¬ 
tion  produces  every  year  more  iron  and  steel  than  the 
whole  of  the  United  Kingdom.  The  Ford  Automobile 
Works  turn  out  every  year  more  motor-cars  than  the 
whole  of  the  United  Kingdom,  and  some  of  the  most 
efficient  American  railways  system  have  each  a  mileage 
equalling,  or  exceeding,  the  railway  mileage  of  the  whole 
of  Great  Britain. 

The  facts  and  figures  given  in  those  pages  prove  that 
the  American  manufacturing  industries  owe  their  supre¬ 
macy,  not  to  the  great  natural  resources  of  the  country, 
as  is  often  asserted,  but  to  the  wisdom  and  energy  of  the 
American  people  and  their  Government.  They  owe  their 
industrial  predominance  mainly  to  the  following  causes : 
To  the  employment  of  the  most  perfect  and  the  most 
powerful  machinery ;  to  their  manufacturing  on  the 
largest  possible  scale  in  giant  undertakings ;  to  the  policy 
of  increasing  production  to  the  utmost  which  is  pursued 
single-heartedly  by  masters  and  workers;  and  to  the 
policy  of  encouragement  and  Protection  pursued  by 
successive  American  Governments. 

The  causes  of  America’s  industrial  pre-eminence  were 


BRITISH  INDUSTRIAL  INEFFICIENCY  137 


well  summarised  as  follows  in  the  final  Report  of  the 
United  States  Industrial  Commission  of  1902 : 

The  following  propositions  are  obviously  true : 

1.  The  more  completely  the  labouring  population  of  the 
world,  and  that  smaller  population  engaged  in  combining 
brain  and  muscle  in  production,  are  kept  employed,  the 
wealthier  the  world  and  the  more  rapid  its  advance, 
provided  wastes  are  kept  down  to  a  minimum. 

2.  The  smaller  the  number  of  non-producers  among 
adults,  the  larger  is  the  production,  the  more  efficient  the 
population  as  wealth-producers,  and  the  most  rapid  its 
progress  in  wealth  production  and  accumulation. 

3.  The  more  generally  and  effectively  the  manual 
labour  of  the  world  is  aided  and  directed  by  brain,  the 
higher  is  its  efficiency. 

4.  The  more  generally  machinery,  and  especially 
automatic  machinery,  can  be  made  to  re-enforce  pro¬ 
ducers  and  distributers  of  wealth,  the  higher  is  the 
efficiency  of  wealth  production.  .  .  a 

The  fundamental  elements  of  efficiency  in  industrial 
production,  in  the  United  States  as  in  any  country,  are 
perhaps  summed  up  as  — 

1.  The  character  of  the  people,  as  given  form  by  race, 
environment,  and  especially  by  social  and  political 
influences. 

2.  The  physical  condition  of  the  people,  as  determined 
by  their  food,  their  habits  of  life,  and  exercise. 

3.  The  skill  and  efficiency  of  the  people  as  tool-users. 

4.  The  quantity  and  productivity  of  tools,  as  deter¬ 
mined  by  design  and  construction,  and  by  combination 
of  the  man  and  the  machine  under  all  the  preceding 
conditions. 

5.  The  effective  organisation  of  business  for  econo¬ 
mising  all  productive  and  distributive  forces. 

Given  a  people  of  constitutional  vigour  and  intelligence, 
with  a  talent  for  invention  and  construction,  with  political 
freedom  and  without  social  caste  control,  with  a  good 
system  of  education  of  mind  and  of  hand,  with  abundance 
of  wholesome  food  and  a  working  day  of  proper  length, 
with  vocation  and  general  opportunity  free  to  all,  and 


138  BRITISH  INDUSTRIAL  INEFFICIENCY 


they  will  soon  acquire  tools  and  machinery,  and  skill  in 
their  use,  and  will  promptly  attain  ability  to  promote 
their  own  elevation  in  maximum  degree  in  minimum  time. 
These  conditions  are  probably  at  the  moment  illus- 
-  trated  in  larger  measure  in  the  industrial  system  of  the 
United  States  than  in  any  other  nation,  though  progress 
toward  their  fulfilment  is  rapid  over  all  the  civilised 
world. 

While  the  system  of  the  successful  American  manu¬ 
facturer  and  his  labour-assisting  machinery  are  also  largely 
available  to  his  foreign  competitor,  and  are,  in  fact, 
sometimes  employed,  the  fundamental  fact  in  the  differ¬ 
ence  between  our  industry  and  that  of  other  countries 
seems  to  be  (as  testified,  for  example,  by  Mr.  Harrah,  of 
the  Midvale  Steel  Works)  the  difference  between  men  and 
the  races  of  men.  The  conservatism  of  Great  Britain  and 
the  comparative  lack  of  ambition,  and  in  some  cases  of 
education,  in  other  European  countries,  and,  above  all, 
their  lack  of  freedom,  social  as  well  as  political,  often 
prevents  them  from  availing  themselves  of  known  and 
approved  methods,  tools,  and  machinery.  The  American 
manufacturer  thus  finds  it  possible  in  many  branches  of 
business  to  compete  successfully  abroad  with  all  nation¬ 
alities,  despite  their  lower  wages,  and  to  build  up  at  home 
the  most  advanced  civilisation. 

It  is  possible,  as  more  fully  pointed  out  elsewhere,  that 
the  shorter  and  better-arranged  workday  of  this  country 
may  have  much  to  do  with  the  maintained  energy, 
alertness,  and  ambition  of  the  American  working-man, 
and  thus  may  be  an  important  factor  in  his  remarkable 
supremacy  in  productive  power  and  in  excellence  of 
products.  The  effect  of  this  productivity  of  American 
labor,  and  of  the  better  conditions  of  life  coming  from 
lessened  hours  of  labour  and  from  larger  returns,  is  illus¬ 
trated  in  a  very  impressive  manner  by  the  growth  of  the 
people  in  size  and  in  their  improved  physical  proportions. 
The  development  of  American  women  in  height  and  in 
increased  vitality  is  a  matter  of  common  remark.  Such 
are  vital  and  social  gains  through  improved  methods  of 
industry  and  general  employment  of  labour-assisting 
machinery. 


BRITISH  INDUSTRIAL  INEFFICIENCY  139 


The  weighty  view  of  the  American  Industrial  Commis¬ 
sion  should  be  made  known  to  every  British  manufacturer 
and  every  British  Labour  leader  and  politician. 

In  industry  as  in  war  success  is  won  not  by  those 
nations  which  possess  the  largest  territory  and  the  greatest 
latent  resources,  but  by  those  which  are  best  equipped, 
best  organised  and  best  directed.  Science  has  abolished 
distance.  Competition  has  become  international,  has 
become  world- wide.  Hence  an  industrial  State  which 
follows  the*  policy  of  drift,  of  laissez  fair e,  which  entrusts 
the  guidance  of  its  industrial  policy  to  doctrinaires  and 
party  politicians,  and  which  deliberately  discards  the 
idea  of  national  organisation  and  nation-wide  co-opera¬ 
tion,  finds  itself  at  the  greatest  disadvantage  in  com¬ 
peting  with  highly  organised  industrial  nations  directed 
by  the  best  experts. 

It  has  become  generally  recognised  in  Great  Britain 
that  industrial  anarchy  must  be  replaced  by  regulated 
national  effort ;  that  the  State  must  harmonise  and  direct 
all  the  economic  energies  of  the  people.  Men  only  differ 
as  to  whether  the  national  industries  should  be  guided 
and  controlled  by  politicians  or  by  bureaucrats  or  by 
experts. 

Good  leaders  make  good  followers  Success  in  industry , 
as  in  war,  depends  chiefly  upon  good  leadership.  As  in 
technical  matters  the  expert  is  superior  to  the  amateur, 
it  is  obvious  that  Britain’s  economic  policy  should  no 
longer  be  determined  by  uncontrolled  politicians  who  are 
mainly  bent  upon  gaining  votes.  The  organised  repre¬ 
sentatives  of  business  should  make  their  influence  felt  in 
Parliament  as  they  do  in  the  United  States.  They 
should  demand  that  the  great  economic  interests  of  the 
nation  should  no  longer  be  sacrificed  to  party  political 
considerations  and  to  the  interests  of  importers  and 
middlemen.  They  should  insist  upon  the  adoption  of  an 


140  BRITISH  INDUSTRIAL  INEFFICIENCY 


economic  policy  favouring  production,  and  they  should 
demand  that  the  great  Departments  of  State  which 
control  the  national  business  should  be  organised  in  a 
businesslike  manner,  and  be  presided  over,  not  by  eminent 
politicians,  but  by  the  ablest  business  men. 

Many  abstract  thinkers,  political  agitators,  poets, 
novelists  and  visionaries  unacquainted  with  the  realities 
of  business  have  urged  that  as  economic  individualism 
has  proved  a  failure,  it  should  be  replaced  by  Socialism. 
Ideal  Socialism  does  not  deign  to  consider  practical 
questions.  It  dreams  of  the  Millennium.  Its  recom¬ 
mendations  need,  therefore,  scarcely  be  considered. 
Practical  Socialism  means  bureaucratic  control,  means 
control  by  salaried  officials.  The  principle  of  successful 
industry  is  progress,  is  constant  change  and  innovation. 
The  principle  of  bureaucracy  is  conservatism,  is  the 
punctilious  observance  of,  and  the  rigid  adherence  to, 
established  rules  and  regulations;  is  hostility  to  change 
and  therefore  of  progress.  In  business  matters  experience 
is  more  precious  than  imagination.  If  Great  Britain 
wishes  to  recreate  her  industries  she  should  rely  for 
guidance  neither  on  party  politicians  nor  on  visionaries, 
but  on  experts,  on  business  men.  As  the  productive 
industries  are  far  more  important  as  creators  of  wealth 
than  is  commerce,  and  as  the  manufacturing  industries 
are  England’s  principal  resource,  the  nation  should  rely 
for  guidance  in  economic  matters,  not  on  bankers, 
financiers,  company  promoters,  stockbrokers,  merchants, 
railway  directors,  and  other  non-producers  who  have 
dominated  Parliament  for  a  long  time,  but  on  the  repre¬ 
sentatives  of  the  productive  industries  which  create  the 
nation’s  solid  wealth.  England  should  follow  no  longer 
a  middleman’s  policy,  nor  a  foreign  trade  policy,  nor  a 
cotton  policy,  but  a  producer’s  policy  in  the  fullest  sense 
of  the  word.  She  should  no  longer  pursue  a  short-sighted 


BRITISH  INDUSTRIAL  INEFFICIENCY  141 


sectional  policy  which  benefits  a  clamorous  or  influential 
part  of  the  community  at  the  cost  of  all  the  others,  but  a 
broad  national  policy  which  fosters  alike  all  the  produc¬ 
tive  industries  without  neglecting  trade,  commerce  and 
finance. 

I  have  shown  in  these  pages  by  means  of  the  best 
official  statistics  available  that  before  the  War  the  Ameri¬ 
can  industrial  worker  produced  on  an  average  approxi¬ 
mately  three  times  as  much  goods,  as  much  wealth,  as 
the  British  industrial  worker ;  that  American  wages  were 
approximately  three  times  as  high  as  British  wages. 
It  follows  that  England  can  treble  her  production,  her 
income  and  her  wealth;  that  the  British  manufacturers 
can  treble  their  profits  and  their  workers  can  treble  their 
wages  by  bringing  British  industrial  efficiency  up  to  the 
level  of  American  industrial  efficiency.  Commerce,  trade 
and  banking  would  naturally  benefit  commensurately 
from  such  trebling  of  output,  wealth  and  national  income. 

In  the  United  States  not  all  industrial  undertakings 
are  efficient.  Some  are  extremely  efficient  and  some  are 
very  inefficient.  In  the  most  efficient  American  factories 
production  per  man  is  about  twice  as  great  as  it  is  in  the 
case  of  the  average  American  factory.  It  follows  that 
England  is  able  not  merely  to  treble  her  income  and 
wealth,  but  to  sextuple  her  wealth  and  income  by  apply¬ 
ing  to  her  industries  the  best  methods  available,  by 
bringing  her  industrial  establishments  up  to  the  level  of 
the  best-equipped  and  best-managed  American  under¬ 
takings.  Great  Britain  can  easily  pay  for  the  War, 
however  long  it  may  last  and  however  costly  it  may  be, 
by  Americanising  her  industries.  Such  a  change  would 
vastly  benefit  manufacturers  and  workers  and  the  nation 
as  a  whole.  However,  all  efforts  at  reforming  the  British 
industries  will  prove  vain  unless  the  workers  abandon 
the  suicidal  policy  of  restricting  output  and  antagonising 


142  BRITISH  INDUSTRIAL  INEFFICIENCY 


improved  machinery  and  improved  methods.  The  ancient 
guilds  destroyed  the  industries  which  they  were  intended 
to  promote  by  their  policy  of  opposing  progress  and 
restricting  output,  by  endeavouring  to  create  an  artificial 
monopoly  of  labour  and  an  artificial  scarcity  of  goods  for 
the  benefit  of  their  members.  The  policy  of  the  British 
trade  unions  may  have  similar  consequences.  Let  us 
hope  that  it  will  be  abandoned.  The  reform  of  the  British 
industries  can  be  carried  out  only  with  the  cordial  co¬ 
operation  of  the  workers. 


CHAPTER  VI 

EDUCATION  AND  ECONOMIC  SUCCESS* 


It  is  certain  that  henceforth  the  most  powerful  nation  will  be, 
not  that  which  possesses  the  most  extensive  territory,  nor  that 
which  has  the  largest  population,  but  that  which  is  the  most  in¬ 
dustrious,  the  most  skilful,  the  best  educated,  the  most  capable 
of  utilising  all  the  means  and  forces  which  science  can  place  at 
man’s  disposal,  and  which  enable  him  to  triumph  over  matter. 
The  greatest  producer  among  nations  may  become  the  foremost 
power  in  the  world. — Report  of  French  Commission  on  Technical 
Education  of  1863. 

The  advance  of  nations  in  prosperity  and  power  depends 
partly  on  the  natural  resources  which  they  possess,  partly 
on  the  activity  and  ability  of  the  people  who  exploit  them. 
The  abilities  of  men  are  either  inborn  or  acquired.  Some 
people,  such  as  the  Greeks,  Armenians,  Jews  and  Chinese, 
are  supposed  to  possess  unusual  natural  gifts  for  commerce, 
exactly  as  the  Czechs  and  gipsies  are  supposed  to  have  an 
inborn  talent  for  music,  the  Japanese  a  natural  gift  for 
the  arts  and  handicrafts,  etc.  Nevertheless,  we  find  that 
the  greatest  economic  success  has  fallen,  not  to  the  nations 
which  are  naturally  most  gifted  for  trade,  but  to  the 
perhaps  less  gifted,  but  best-educated  nations  which 
excel  the  more  gifted  ones  in  music  and  all  other  arts  as 
well.  It  seems,  therefore,  that  acquired  ability  is  at 
least  as  valuable  as  inborn  ability.  With  the  rapid 
advance  of  science  applied  to  commerce  and  industry, 
the  importance  of  education,  of  scientific  training,  becomes, 
of  course,  greater  and  greater.  Natural  ability  alone  is 

*  From  The  Fortnightly  Review,  August  and  September,  1918. 

'  143 


144  EDUCATION  AND  ECONOMIC  SUCCESS 


becoming  of  secondary  importance  in  a  world  of  highly 
trained  specialists.  After  all,  the  naturally  most  able 
men,  wrestlers,  boxers,  singers,  painters,  etc.,  arrive  at 
the  highest  degree  of  perfection  only  by  long-continued 
training,  exactly  as  do  the  best-bred  and  best-endowed 
race-horses  and  bloodhounds. 

Natural  talent,  unassisted  by  school  education,  may 
create  most  successful  men  of  business  and  inventors, 
such  as  Rockefeller,  Carnegie  and  Edison.  These  men 
were  not  school- taught.  They  educated  themselves. 
However,  it  is  worth  noting  that  many  of  the  great  self- 
taught  men  have  in  after-life  expressed  keen  regret  at 
their  lack  of  education,  and  some  of  them  are  so  strongly 
convinced  of  its  advantage  that  they  have  devoted 
countless  millions  to  educational  purposes,  as  have 
Rockefeller,  Carnegie  and  other  most  successful  American 
business  men. 

Education  may  be  either  ornamental  or  practical. 
Unfortunately,  British  education  has  been  rather  the 
former  than  the  latter.  It  has  been  an  education  which 
has  been  designed  by  clergymen  and  classical  scholars 
for  the  use  of  a  leisured  class  which  possesses  ample  fixed 
incomes,  and  which,  therefore,  needs  no  preparation 
for  the  struggle  of  life.  English  education  has  rather 
developed  culture,  character  and  manners  than  the 
practical  abilities.  We  live  in  a  world  of  keen  competition. 
The  principal  aim  of  the  school  should  be  to  supply  the 
growing  generation  with  useful  knowledge,  to  sharpen  its 
intelligence,  and  to  teach  the  young  to  think  correctly 
and,  before  all,  to  work  conscientiously,  and  to  love  work. 
Cramming,  as  practised  in  England  and  in  other  countries 
as  well,  may  possibly  develop  the  memory,  but  is  destruc¬ 
tive  of  the  critical  faculty.  It  deadens  the  intelligence. 
Besides,  at  the  English  High  Schools  and  Universities — 
but  not  so  much  at  the  Scotch — the  students  learn  chiefly 


EDUCATION  AND  ECONOMIC  SUCCESS  145 


how  to  idle  more  or  less  gracefully  and  to  toy  with  work. 
To  take  a  keen  interest  in  one’s  work,  to  discuss  one’s 
studies,  to  live  for  one’s  work,  is  “  bad  form  ”  in  England. 
In  the  United  States  and  in  Germany  study  is  taken  far 
more  seriously.  The  difference  between  education  in 
England  and  education  in  Germany  and  the  United 
States  is  very  striking.  The  advance  of  nations  depends 
largely  on  the  spirit  which  education  in  the  widest  sense 
of  the  word  has  raised  among  them.  The  rapid  economic 
advance  of  the  United  States  and  of  Germany  and  the 
relative  stagnation  of  the  British  industries  must  be 
largely  attributed  to  educational  causes.  Men  who  have 
received  a  gentleman’s  education,  who  have  acquired  the 
spirit  and  the  manners  of  the  leisured  class,  will  be  beaten 
in  the  race  for  success  by  men  who  love  work  and  who 
have  developed  their  abilities  to  the  highest  point. 

The  defects  of  English  education — especially  its  obso¬ 
leteness  and  its  contempt  of  the  useful  and  the  necessary — 
have  brought  it  into  disrepute  with  practical  men.  After 
all,  education  should  prepare  men  and  women  for  their 
future  tasks.  The  Report  of  the  United  States  Industrial 
Commission  of  1902  stated  correctly: 

Only  a  very  small  fraction  of  the  people  feel  able  to 
pursue  a  purely  literary  and  liberal  course  of  culture 
beyond  the  years  of  childhood.  Any  education  that  is  to 
attract  the  mass  of  the  people  after  these  years  are  passed 
must  have  a  direct  and  evident  bearing  upon  the  activities 
of  adult  life. 

Education  may  be  either  autocratic  or  democratic  in 
character.  English  educationalists  have  hitherto,  and 
I  believe  mistakenly,  studied  almost  exclusively  the 
educational  system  of  autocratic  Germany,  and  have 
endeavoured  to  organise  British  education  upon  the 
German  model .  Hitherto  American  education  has  en j  oyed 


146  EDUCATION  AND  ECONOMIC  SUCCESS 


little  prestige  abroad,  largely  because  the  United  States 
possess  a  considerable  number  of  people  unable  to  write 
or  read,  while  Germany  possesses  practically  none.  Yet 
the  mere  fact  of  America’s  success  in  many  directions  in 
which  trained  ability  of  the  highest  kind  is  required 
might  have  convinced  educationalists  that  the  American 
educative  system  must  be  a  most  powerful  engine  for 
good.  It  is  true  a  large  number  of  Americans  can  neither 
read  nor  write.  This  is,  after  all,  not  unnatural.  In  a 
country  which  in  part  is  sparsely  settled  and  where 
distances  are  enormous  the  creation  of  schools  for  all  is 
exceedingly  difficult,  and  in  view  of  the  independence  of 
the  American  character  it  is  impossible  to  compel  every 
child  to  go  to  school,  as  is  done  in  Germany.  Moreover, 
the  large  majority  of  American  analphabets  is  furnished 
by  negroes  whose  fathers  were  slaves  and  by  immigrants 
from  the  illiterate  South  and  East  of  Europe.  In  1910 
there  were,  according  to  the  Census,  in  the  United  States 
5,516,163  illiterates  aged  ten  years  or  over.  Of  these, 
2, 227,731  were  negroes,  1,650,361  were  foreign-born 
whites,  151,388  were  whites  of  foreign  or  mixed  parentage, 
and  only  1,378,884  were  native-born  whites  of  native 
parentage.  The  great  majority  of  the  latter  were  “  mean 
whites  ”  living  among  the  negroes  in  the  South.  Only 
those  disparage  American  education  who  are  neither 
acquainted  with  its  difficulties  nor  with  its  achieve¬ 
ments. 

The  practical  success  of  the  United  States  has  been  as 
striking  as  that  of  Germany.  It  is  largely  due  to  the 
educational  system  of  the  Great  Republic.  Let  us,  then, 
see  what  we  may  learn  from  America’s  example  and 
experience. 

Education  may  be  disseminated  by  the  schools  which 
train  the  young  and  by  other  agencies  which  instruct  and 
lead  the  grown-up  people  in  after-years.  The  latter  is  at 


EDUCATION  AND  ECONOMIC  SUCCESS  147 


least  as  important  as  the  former.  Both  branches  of  the 
education  will  be  considered  in  the  following  pages. 

The  Puritans  who  founded  the  American  colonies  were 
keenly  interested  in  national  education.  The  Americans 
were  among  the  best-read  and  the  best-educated  nations 
since  the  beginning  of  their  history.  Education  has 
always  been  far  more  advanced  in  the  United  States  than 
in  England.  The  fathers  of  the  Republic  believed  that 
only  a  well-informed  and  well-educated  nation  could  be 
happy,  prosperous  and  free,  and  they  acted  in  accordance 
with  that  conviction.  From  the  earliest  days  the  expendi¬ 
ture  of  the  Americans  on  education  has  been  prodigious, 
and  it  has  been  increasing  constantly  and  more  and  more 
rapidly  ever  since .  Of  late  years  the  progress  of  America’s 
education  has  been  absolutely  gigantic.  According  to 
some  America  has  become  education-mad.  The  recent 
expansion  of  American  education  may  in  part  be  gauged 
from  the  following  most  interesting  figures : 


Progress  of  American  Public  Schools. 


Year . 

Population 
Five  to 
Eighteen 
Years  Old. 

Average 
Daily  School 
Attendance. 

Students  in 
Universities , 
College ,  and 
Schools  of 
Technology. 

Total 

Educational 

Expenditure. 

1871  .. 

12,305,600 

4,545,317 

(1873)  23,392 

Dots. 

69,107,612 

1876  .. 

13,708,000 

5,291,376 

32,540 

83,082,578 

1881  .. 

15,379,290 

6,145,932 

39,048 

83,642,964 

1886  .. 

17,122,060 

7,526,351 

40,421 

113,322,545 

1891  .. 

18,897,076 

8,408,323 

58,405 

147,494,809 

1896  .. 

20,863,807 

9,781,475 

86,864 

183,498,965 

1901  .. 

21,982,797 

10,714,613 

103,351 

227,465,664 

1906  .. 

23,792,723 

11,712,300 

129,181 

307,765,659 

1911  .. 

24,745,562 

12,871,980 

183,572 

446,726,929 

1915  .. 

26,425,100 

14,964,886 

237,011 

605,460,785 

While  between  1871  and  1915  the  number  of  the  people 
between  the  ages  of  five  and  eighteen  has  a  little  more 


148  EDUCATION  AND  ECONOMIC  SUCCESS 


than  doubled,  the  average  daily  attendance  at  the  schools 
has  considerably  more  than  trebled.  In  1871  the  average 
daily  attendance  amounted  only  to  36-9  per  cent,  of  the 
people  bewteen  the  ages  of  five  and  eighteen,  but  by  1915 
it  had  grown  to  56-6  per  cent. 

General  education  has  spread  considerably  in  the 
United  States,  but  higher  education  has  increased  at  a 
most  extraordinary  and  almost  incredible  rate.  Between 
1873  and  1915,  while  the  population  of  school  age  has  a 
little  more  than  doubled,  the  number  of  students  at  the 
American  Universities,  colleges  and  schools  of  technology 
has  increased  more  than  tenfold.  During  the  nine  years 
from  1906  to  1915  the  number  of  American  High  School 
students  has  almost  doubled.  It  is  also  worth  noting 
that  between  1871  and  1915  the  expenditure  of  the  public 
schools  has  increased  nearly  ninefold,  and  that  during  the 
short  space  during  1906  and  1915  school  expenditure  has 
almost  doubled. 

The  figures  given  in  the  table  apply  only  to  the  daily 
average  attendance  at  the  public  schools  and  to  the  expen¬ 
diture  of  these  establishments.  The  figures  relating  to  the 
number  of  scholars  enrolled  at  the  various  schools,  both 
public  and  private,  and  to  the  expenditure  of  the  public 
and  private  schools  combined,  are,  of  course,  larger.  The 
Report  of  the  United  States  Commissioner  of  Education 
for  1914  stated: 

In  round  numbers  there  were  22,000,000  persons 
enrolled  in  educational  establishments  in  the  United 
States  in  1914.  .  .  .  The  teachers  for  this  educational 
army  numbered  700,000,  of  whom  566,000  were  in  public 
schools.  .  .  .  The  cost  of  education  for  the  year,  as 
nearly  as  can  be  estimated,  was  $750,000,000.  This 
three-quarters  of  a  billion  is  a  relatively  small  amount 
when  compared  with  other  items  in  the  public  ex¬ 
pense. 


EDUCATION  AND  ECONOMIC  SUCCESS  149 


In  1914  the  United  States  spent  on  education  twice  as 
much  as  the  United  Kingdom  spent  before  the  War  on 
its  Army  and  Navy  combined.  In  1914  the  United  States 
spent  almost  exactly  as  much  on  education  as  the  United 
Kingdom  spent  before  the  War  under  the  Budget  on  its 
Army,  its  Navy,  its  whole  Civil  Service,  on  Old  Age 
Pensions,  Public  Education,  National  Insurance  and 
Labour  Exchanges,  and  the  interest  and  sinking  fund  of 
the  National  Debt  combined.  Yet  the  American  Com¬ 
missioner  of  Education  described  that  gigantic  expendi¬ 
ture  as  being  “  relatively  small  ”!  As  I  said  before,  the 
Americans  have  become  education-mad.  However,  that 
is  a  very  healthy  form  of  insanity. 

As  the  progress  of  nations  depends  rather  on  the  trained 
ability  of  its  leaders  than  on  that  of  the  rank  and  file,  a 
good  higher  education  is  particularly  important,  for  it 
furnishes  able  scientists,  engineers,  chemists,  organisers, 
administrators  and  other  experts  whose  activity  deter¬ 
mines  the  fate  of  nations .  The  Americans  have  promoted 
higher  education  in  all  its  branches  with  the  utmost 
enthusiasm  and  energy.  That  may  be  seen  by  the  fact 
that  between  1873  and  1915  the  attendance  at  the  Univer¬ 
sities  and  other  High  Schools  has  increased  more  than 
tenfold,  and  by  other  indications  as  well.  The  growth  of 
the  American  Universities  and  of  the  other  High  Schools 
has  been  greatly  promoted  by  the  wealthy  citizens,  and 
especially  by  the  “  captains  of  industry,”  by  the  great 
self-made  men  who,  having  lacked  a  proper  education, 
value  it  most  highly.  An  ever-growing  stream  of  gifts 
is  flowing  towards  the  educational  establishments  of  the 
United  States.  How  vast  and  how  regular  these  gifts 
are  and  how  rapidly  they  are  increasing  may  be  seen  from 
the  following  figures  supplied  by  the  United  States 
Commissioner  of  Education: 


11 


150  EDUCATION  AND  ECONOMIC  SUCCESS 


Gifts  and  Bequests  to  Education. 


Dols. 

Dols. 

In 

1874  . . 

. .  6,053,804 

In 

1904  . . 

. .  17,261,375 

In 

1875  . . 

.  .  4,126,562 

In 

1905  .  . 

..  21,827,875 

In 

1876  .. 

.  .  4,691,845 

In 

1906  . . 

..  23,347,070 

In 

1877  . . 

.  .  3,015,256 

In 

1907  . . 

.  .  28,585,780 

In 

1878  . . 

.  .  3,103,289 

In 

1908  .  . 

..  19,763,421 

In 

1879  . . 

. .  5,249,810 

In 

1909  . . 

..  21,192,450 

In 

1880  . . 

. .  5,518,501 

In 

1910  . . 

. .  24,755,663 

In 

1881  . . 

. .  7,440,224 

In 

1911  .. 

. .  27,634,029 

In 

1882  . . 

1 

In 

1912  . . 

. .  30,061,310 

In 

1883  .  . 

..  7,141,363 

In 

1913  .. 

..  29,651,879 

In 

1884  . . 

..  11,270,286 

In 

1914  .. 

..  31,357,398 

Between  1871  and  1914,  $584,418,082,  or  nearly 

£120,000,000,  were  thus  given  to  the  American  schools. 
Whereas  wealthy  Englishmen  give  and  bequeath  money 
most  freely  to  charities,  hospitals,  churches  and  mission¬ 
ary  enterprises,  endeavouring  to  help  those  who  are 
already  broken,  wealthy  Americans  strive  to  elevate  the 
nation,  to  enrich  the  people  and  to  prevent  man  from 
becoming  poor  and  diseased,  by  promoting  their  educa¬ 
tion  and  by  making  them  useful  citizens.  Of  the  money 
given  or  bequeathed  to  education  the  bulk  goes  to  the 
High  Schools,  and  serves  to  create  leaders  of  men  who  are 
the  most  valuable  citizens  of  the  State.  The  gifts  and 
bequests  devoted  to  education  in  1914  were  distributed 


as  follows : 

Dols. 

To  Universities  and  Colleges  . .  .  fc  26,670,017 

To  Schools  of  Theology  . .  . .  . .  1,558,281 

To  Schools  of  Medicine  . .  . .  . .  1,495,773 

To  Schools  of  Law  . .  . .  . .  . .  203,067 

To  Normal  Schools  . .  . .  . .  . .  723,714 

To  Private  High  Schools  . .  . .  . .  706,546 


31,357,398 

Care  of  the  body  is  more  immediately  necessary  than 
care  of  the  soul.  It  will  be  noticed  that  the  funds  given 
to  schools  of  theology  are  extremely  small. 


EDUCATION  AND  ECONOMIC  SUCCESS  151 


Among  the  greatest  benefactors  to  education  were 
Rockefeller  and  Carnegie,  two  men  who,  almost  without 
education,  began  life  in  the  humblest  circumstances. 
How  greatly  these  two  men  prize  education  may  be  seen 
from  the  following  list  of  their  gifts  for  educational 
purposes,  which  is  probably  incomplete,  and  which  has 
been  extracted  from  Koester’s  book,  The  Price  of  In¬ 
efficiency ,  New  York,  1913: 


Rockefeller’s  Gifts.. 

General  Education  Fund  . . 
University  of  Chicago 
Institute  of  Medical  Research 
Rush  Medical  College 
Barnard  College 
Yale  University 
Harvard  University  ..  4. 

South  Education  Fund 

Small  colleges  in  United  States  . . 


Dols. 

53,000,000 

23,309,000 

8,240,000 

6,000,000 

1,375,000 

1,300,000 

1,000,000 

1,125,000 

23,000,000 


118,349,000 


Carnegie’s  Gifts. 

Carnegie  Institute,  Pittsburg  (Research)  . . 
Carnegie  Institute,  W ashington 
Scotch  Universities 
Polytechnic  School,  Pittsburg 
Small  colleges  in  United  States 
Carnegie  Corporation  of  New  York  (Re¬ 
search  and  Education).. 

Libraries 


Dols. 

16,000,000 

25,000,000 

10,000,000 

2,000,000 

20,000,000 

25,000,000 

52,000,000 


150,000,000 


Owing  to  the  generosity  of  their  numerous  wealthy 
patrons,  the  American  Universities  and  other  High  Schools 
are  magnificently  furnished  with  all  conveniences,  and  the 
most  perfect  and  most  costly  scientific  apparatus.  Their 
property  was  officially  classified  and  valued  in  1914  as 
follows : 


152  EDUCATION  AND  ECONOMIC  SUCCESS 


Properties  of  Universities,  Colleges  and  Technological 


Schools  in  1914. 

Dols. 

Value  of  ground 

.  87,757,360 

Value  of  buildings  . . 

.  281,665,426 

Value  of  furniture,  books  and  apparatus. 

.  70,113,586 

Productive  funds 

.  362,742,823 

802,279,195 

The  American  students  study  under  the  best  possible 
conditions.  The  vastness  of  the  capital  invested  in  the 
Universities,  etc.,  enables  us  to  gauge  the  excellence  of 
their  accommodation  and  of  their  scientific  appliances. 

All  the  leading  Universities  and  schools  possess  vast 
funds,  owing  to  the  munificence  of  opulent  Americans. 
How  vast  they  are  may  be  seen  from  the  following  figures : 

Endowment  Funds  in  1914. 

Dols. 

Columbia  University  . . 

30,770,868 

Leland  Stanford  University  . . 

23,961,338 

Harvard  University 

21,912,853 

Chicago  University 

18,598,273 

Yale  University 

15,379,363 

Cornell  University 

14,145*873 

Rice  Institute  . . 

10,000,000 

Carnegie  Institute 

8,000,000 

Johns  Hopkins  . . 

6,265,480 

Washington  University 

6,156,223 

Pennsylvania  University 

5,206,308 

Princeton 

5,194,861 

In  1914  the  yearly  income  of  some  of  the  best-known 

Universities  was  as  follows : 

Dols. 

Cornell  University 

6,790,260 

Columbia  University  . . 

6,686,869 

Harvard  University 

4,287,185 

Wisconsin  University  . . 

3,101,372 

Minnesota|University  ... 

3,033,891 

EDUCATION  AND  ECONOMIC  SUCCESS  153 


Dols. 

Illinois  University  . .  . .  . .  2,824,053 

Yale  University  . .  . .  . .  2,600,629 

California  University  ...  . .  . .  2,499,457 

Pennsylvania  University  . .  . .  1,679,809 

Washington  University  . .  . .  1,627,499 


Universities  which  possess  such  gigantic  funds  and  such 
huge  yearly  incomes  are  naturally  provided  in  a  most 
lavish  manner  with  the  best  of  everything.  Notwith¬ 
standing  their  comparatively  recent  creation,  American 
Universities  have  excellent  libraries.  In  191 4  Harvard 
had  1,083,750  volumes,  Yale  1,000,000  volumes,  Columbia 
550,429  volumes,  Cornell  439,517  volumes,  Chicago 
431,362  volumes,  Pennsylvania  421,097  volumes,  etc. 
Altogether  the  American  Universities  possessed  18,199,354 
volumes  in  that  year. 

The  United  States  are  the  country  of  mammoth 
undertakings  of  every  kind.  However,  the  American 
Universities  deserve  admiration  not  only  because  of  the 
great  and  rapidly  increasing  number  of  their  students, 
because  of  the  vastness  of  their  financial  resources  and  the 
excellence  of  their  mechanical  apparatus,  but  also  because 
of  their  success  in  training  large  numbers  of  able  men  and 
women,  and  in  promoting  science  and  research.  The 
American  Universities  are  ahead  of  the  European  Uni¬ 
versities  in  some  subjects,  such  as  engineering,  law, 
dentistry,  etc.,  but  they  lag  behind  in  others,  such  as 
medicine .  However ,  their  shortcomings  are  being  remedied 
with  rapidity  and  energy  . 

Of  course,  the  numerous  Universities  vary  in  efficiency. 
Some  of  the  Eastern  institutions  have  arrived  at  maturity, 
and  need  not  fear  comparison  with  any  of  the  most 
famous  institutions  of  Europe.  On  the  other  hand,  some 
of  the  young  Universities  in  the  West  and  South  suffer 
from  lack  of  students,  lack  of  eminent  teachers,  and  lack 


154  EDUCATION  AND  ECONOMIC  SUCCESS 


of  means,  a  condition  which  is  only  natural  in  a  new 
country  which  is  overstocked  with  Universities  and 
colleges.  After  all,  too  many  schools  is  better  than  too 
few. 

The  great  efficiency  of  the  fully  developed  University 
is  largely  ascribable  to  their  organisation.  The  American 
people  believe  in  one-man  Government  and  in  youth. 
Exactly  as  the  executive  power  of  the  Great  Republic  is 
vested,  not  in  a  jointly  responsible  Cabinet,  but  in  a 
single  man,  the  President,  who  is  possessed  of  almost 
regal  power  and  authority,  the  direction  of  the  Univer¬ 
sities  is  entrusted,  not  to  a  committee  of  professors,  as  in 
Europe,  but  to  a  President  who  nominally  carries  out  the 
decisions  of  the  Trustees,  but  who  in  reality  is  the  supreme 
head.  Presidents  qan  make  or  mar  a  University.  Pro¬ 
fessor  Eliot  of  Harvard  University  became  President  of 
that  institution  in  1869,  at  the  early  age  of  thirty-five, 
and  he  has  directed  it  during  forty  years.  The  premier 
University,  and  the  Universities  in  general,  owe  much  to 
President  Eliot,  who  has  completely  reformed  American 
University  teaching. 

It  is  often  asserted,  and  it  is  widely  believed,  that  in 
the  land  of  the  almighty  dollar  money  governs  everything, 
that  idealism  is  non-existent.  That  assertion  is  disproved 
by  the  fact  that  many  of  the  ablest  Americans,  who  could 
earn  large  incomes  in  private  employment,  have  devoted 
their  life  to  science  or  to  administration,  although  the 
United  States  pay  totally  inadequate  salaries  to  professors 
and  to  high  Government  officials.  As  a  rule,  full  pro¬ 
fessors  receive  a  salary  of  from  $3,000  to  $5,000  per  year, 
assistant  professors  are  given  from  $1,800  to  $3,000  per 
year,  and  University  instructors  are  paid  from  $1,000  to 
$2,000  per  year.  The  salaries  of  the  great  experts 
employed  in  the  Government  service  are  similarly  low. 
In  view  of  the  high  level  of  general  earnings — a  brick- 


EDUCATION  AND  ECONOMIC  SUCCESS  155 


layer  can  earn  as  much  as  a  University  professor — and  the 
higli  standard  of  living  in  the  United  States,  the  pro¬ 
fessorial  salaries  paid  are  extremely  unsatisfactory. 
Professors  and  high  officials  live  in  poverty  unless  they 
possess  private  means.  The  fact  that,  nevertheless, 
some  of  the  most  eminent  American  engineers,  chemists, 
lawyers,  patent  specialists,  etc.,  may  be  found  at  the 
Universities  and  in  Government  offices  is  an  eloquent 
proof  of  American  idealism  and  of  American  devotion  to 
science . 

The  American  University  professors  suffer  not  only 
from  insufficiency  of  remuneration,  but  also  from  in¬ 
security  of  tenure.  As  a  rule  instructors  are  engaged  by 
the  year,  assistant  professors  for  three  years,  and  full 
professors  “  during  good  behaviour  ”  or  “  at  the  pleasure 
of  the  Trustees,”  in  the  terms  of  their  contract.  Life 
professorships  with  pensions  after  retirement  on  the 
European  model  are  practically  unknown.  Hence  pro¬ 
fessors  cannot  consider  their  position  as  a  sinecure,  as  do 
so  many  European  professors,  but  have  to  justify  their 
existence  by  constant  progress  and  useful  activity.  If 
they  fail  to  keep  abreast  of  the  times,  they  may  lose  their 
position  and  their  income. 

The  development  of  the  Universities  proper  has  been 
tremendous,  but  that  of  the  agricultural  and  mechanical 
colleges  has  been  even  more  extraordinary.  By  an  Act 
of  Congress  of  July  2,  1862,  passed  in  the  midst  of  the 
Civil  War,  Federal  Land  Grants  were  made  for  the 
endowment  of  agricultural  and  mechanical  colleges. 
These  institutions  were  rapidly  established  in  all  the 
States  and  territories  of  the  Union.  They  were  intended 
to  supply  in  the  first  place  useful  practical  knowledge  to 
those  engaged  in  agriculture,  engineering,  manufacturing 
and  the  handicrafts,  but  they  have  gradually  increased 
their  scope  to  such  an  extent  that  some  of  them  are 


156  EDUCATION  AND  ECONOMIC  SUCCESS 


emulating  the  Universities.  The  incredibly  rapid  de¬ 
velopment  of  these  institutions  during  recent  years  may 
be  seen  from  the  following  table: 


Agricultural  and  Mechanical  Colleges. 


Year. 

Yearly 

Income. 

Number  of 
Students. 

Value  of 
Farms. 

Value  of 
All  Property . 

1892  .. 

Dole. 

4,033,833 

13,786 

Dots. 

2,776,462 

Dots. 

7,012,106 

1895  .. 

4,179,662 

15,973 

1,630,267 

9,711,975 

1898  .. 

5,999,916 

20,974 

2,580,799 

20,305,675 

1901  .. 

7,325,604 

29,950 

4,540,014 

68,084,925 

1904  .. 

10,885,550 

37,135 

6,350,992 

76,564,424 

1907  .. 

14,492,884 

42,424 

11,055,845 

97,446,701 

1910  .. 

20,890,610 

60,625 

21,070,151 

117,843,129 

1914  .. 

34,891,224 

69,132 

23,981,085 

160,298,353 

Between  1892  and  1914  the  number  of  students  at  the 
agricultural  and  mechanical  colleges  has  increased  five¬ 
fold  .  The  yearly  income  and  the  value  of  the  demonstra¬ 
tion  farms  of  these  institutions  has  increased  nearly  nine¬ 
fold,  and  the  value  of  all  their  property  nearly  twenty- 
three- fold.  In  1914  their  property  was  officially  classified 
as  follows : 


Dots. 

Value  of  farms  and  grounds  . . 

. .  23,981,085 

,,  buildings 

. .  51,825,766 

,,  apparatus  and  machinery 

..  16,842,273 

,,  libraries 

5,996,787 

,,  live  stock 

1,686,282 

Land  Grant  Funds 

. .  18,010,398 

Other  permanent  funds 

.  .  28,055,615 

Total 

.  .  160,298,353 

The  agricultural  and  mechanical  colleges  are  the 
Universities  of  the  people  in  the  backwoods,  are  the  High 
Schools  of  the  poor.  By  their  practical  instruction  they 
have  vastly  benefited  the  people. 


EDUCATION  AND  ECONOMIC  SUCCESS  157 


In  addition  to  the  agricultural  and  mechanical  colleges, 
the  United  States  possess  hundreds  of  institutions  of 
every  kind  which  provide  High  School  tuition  in  all  the 
arts  and  sciences.  They  cater  for  general  students  and 
for  specialists,  but  they  are  too  numerous  and  too  varied 
to  describe.  At  any  rate,  men  and  women  desirous  of 
self-improvement,  of  earnest  study,  of  scientific  research, 
can  find  suitable  institutions  in  every  part  of  the  Union. 

The  United  States  owe  undoubtedly  much  of  their 
progress  to  the  ability  of  their  leaders.  The  high  ability 
displayed  by  American  scientists,  architects,  engineers, 
chemists,  etc.,  is  largely  due  to  the  excellence  of  their 
educational  system,  and,  before  all,  to  the  fact  that 
education  has  been  so  lavishly  endowed  by  the  Federal 
Government,  the  individual  States,  the  cities  and  towns, 
and  by  wealthy  individuals,  that  opportunities  to  acquire 
knowledge  from  the  best  experts  and  to  rise  to  the  highest 
positions  in  life  have  been  brought  to  the  door  of  the 
humblest  dwellings.  In  the  United  States  the  best 
education  is  not  exclusive.  It  is  not  reserved  to  the 
select  few.  The  highest  and  the  most  thorough  education 
is  not  the  privilege  of  a  narrow  class,  but  has  been  brought 
within  the  reach  of  all,  even  of  the  poorest.  Talent  is  not 
starved  for  lack  of  opportunity.  The  Americans  have 
adopted  Napoleon’s  motto,  “  La  carriere  ouverte  aux 
talents.  ’ ’  The  ability  of  America’s  leaders  in  the  economic 
field  is  so  great  because  the  leaders  are  selected,  not  from 
a  small  number  of  privileged  individuals,  but  from  the 
whole  body  of  a  great  nation.  Lord  Bryce  wrote  in  his 
excellent  work  The  American  Commonwealth : 

It  is  the  glory  of  the  American  Universities,  as  of  those 
of  Scotland  and  Germany,  to  be  freely  accessible  to  all 
classes  of  the  people.  .  .  . 

In  every  civilised  country  the  march  of  scientific  dis¬ 
covery  has  led  to  an  enormous  increase  in  the  applications 


158  EDUCATION  AND  ECONOMIC  SUCCESS 


of  science  to  productive  industry.  This  has  been  followed 
by  a  demand  for  men  conversant  with  these  applications, 
and  to  supply  that  demand  the  teaching  of  applied  science 
has  been  provided  on  a  scale  undreamed  of  even  a  genera¬ 
tion  ago.  Nowhere,  perhaps  not  even  in  Germany,  has 
this  movement  gone  so  fast  or  so  far  as  in  the  United 
States.  While  the  existing  Universities  have  been 
enlarged  by  the  addition  of  scientific  departments,  a  host 
of  independent  or  affiliated  scientific  schools  and  technical 
institutes  have  sprung  up.  Most  of  these  have  been 
planted  in  the  cities,  but  the  agricultural  colleges,  perhaps 
the  most  numerous  class,  are  often  placed  in  rural  areas. 
Of  these  latter,  many  are  really  secondary  schools,  or  are 
teaching  engineering  quite  as  much  as  agriculture,  but 
some  of  the  best  have  experimental  farms  attached  to 
them.  .  .  . 

One  who  surveys  the  progress  of  the  United  States 
during  the  last  fifteen  or  twenty  years  finds  nothing  more 
significant  than  the  growth  of  the  Universities  in  number, 
in  wealth,  and  in  the  increased  attendance  of  students 
from  all  ranks  of  life.  They  have  become  national  and 
popular  in  a  sense  never  attained  before  in  any  country. .  . . 

The  Universities  and  colleges  have,  taken  as  a  whole, 
rendered  an  immense  service.  They  have  brought 
instruction  within  the  reach  of  every  boy  and  girl  of  every 
class.  They  receive  a  larger  proportion  of  the  youthful 
population  than  do  any  similar  institutions  in  any  other 
country.  They  are  resorted  to  hardly  less  by  those  who 
mean  to  tread  the  paths  of  commerce  or  industry  than  by 
those  who  prepare  themselves  for  a  learned  profession. 
They  have  turned  a  University  course  from  being  the 
luxury  which  it  has  been  in  the  Old  World  into  being 
almost  a  necessary  of  life.  And  they  have  so  expanded 
their  educational  scheme  as  to  provide  (in  the  larger 
institutions)  instruction  in  almost  every  subject  in  which 
men  and  women  are  likely  to  ask  for  it. 

Guitteau  wrote  in  his  book  Government  and  Politics  in 
the  United  States: 

From  the  first  century  A.n.  down  to  the  very  beginning 
of  the  nineteenth  century,  education  was  almost  universally 


EDUCATION  AND  ECONOMIC  SUCCESS  159 


controlled  by  the  Church,  and  was  confined  to  the 
wealthier  classes;  while  to-day  education  is  generally 
recognised  as  a  function  of  the  State,  and  its  benefits  are 
freely  offered  to  all  children,  the  expense  being  borne  by 
the  community.  Nowhere  has  this  modern  conception 
of  free  public  education  been  more  fully  realised  than  in 
the  United  States. 

Progressive  and  open-minded  men  never  cease  learning. 
The  acquisition  of  knowledge  comes  to  an  end  only  with 
the  grave.  Education  in  the  widest  sense  of  the  word 
does  not  end  with  the  school  and  University.  Mature 
men  may  be  taught  by  instruction  suitably  given  and  by 
example.  American  statesmen,  discarding  disdainfully 
the  doctrines  of  laissez  faire ,  have  striven  to  foster  the 
national  industries,  not  only  by  a  protective  tariff,  but 
by  all  other  available  means  as  well,  and  they  have 
endeavoured  particularly  to  increase  the  economic 
efficiency  of  the  people  both  by  the  tuition  of  grown-up 
individuals  and  by  example. 

The  great  characteristics  of  American  education,  as 
given  at  the  schools,  colleges  and  Universities,  are  two: 
prodigal  lavishness  and  great  practical  efficiency.  These 
two  characteristics  are  to  be  found  also  in  the  education 
which  the  American  Government  supplies  to  its  mature 
citizens. 

The  great  Government  departments  of  the  Union  and 
of  the  individual  States  composing  it,  exist  not  only  for 
the  purpose  of  administration,  but  for  that  of  education 
as  well.  The  greatest  and  the  most  important  educa¬ 
tional  centre  of  the  United  States  is  situated,  not  in  New 
York  or  in  Boston,  not  in  Chicago  or  in  Philadelphia,  but 
in  Washington,  the  Federal  Capital.  In  1917  Professor 
Caullery  of  the  Sorbonne,  a  French  Exchange  professor, 
who  lectured  at  Harvard  in  1916,  published  a  little  book, 
Les  Universites  et  la  Vie  Scientifique  aux  fttats-Unis. 


160  EDUCATION  AND  ECONOMIC  SUCCESS 


The  longest  chapter  contained  in  it  describes  the  scientific 
Government  departments  at  W ashington .  In  that  chapter 
we  read: 

The  Federal  Government  controls  only  a  small  portion 
of  the  national  life,  because  of  the  sovereignty  possessed 
by  the  individual  States.  Nevertheless,  it  has  been  able 
to  create  some  institutions  which  are  far  more  important 
than  similar  institutions  which  may  be  found  elsewhere. 
Among  these  the  Scientific  Departments  attached  to  the 
different  branches  of  the  Administration  are  particularly 
remarkable.  During  the  last  half  century  the  practical 
value  of  science  has  been  fully  realised  by  the  Americans, 
and  they  have  devoted  to  science  ever-increasing  amounts 
for  the  good  of  the  country.  .  .  . 

Washington,  the  seat  of  the  Federal  Government,  has 
become  an  important  centre  of  science  through  the 
growth  of  the  Scientific  Government  Departments.  The 
United  States  possess  a  Washington  Science,  which  is 
often  compared  and  contrasted  with  College  Science, 
with  the  Science  of  the  Universities.  .  .  .  The  important 
point  to  remember  is  that  the  Federal  Government 
believes  in  the  practical  value  of  science  and  that  the 
American  Government,  by  promoting  science  in  its 
departments,  has  undoubtedly  been  largely  instrumental 
for  the  increase  in  the  productive  power  of  the  nation 
and  for  the  disappearance  of  the  deadly  spirit  of  con- 
servativism  and  routine  from  economic  life. 

As  an  adequate  account  of  the  Scientific  Department 
in  Washington  and  of  their  educational  activities  and 
achievements  would  require  a  large  volume,  I  would 
briefly  describe  one  or  two  of  these  departments  in  the 
words  of  the  most  authoritative  exponents. 

Among  the  scientific  and  educational  departments  of 
the  United  States,  the  Department  of  Agriculture  is  the 
largest  and  it  is  particularly  interesting  because  the  value 
of  the  services  which  it  has  rendered  is  clear  to  all.  The 
Americans  are  an  intensely  practical  people.  Hence 


EDUCATION  AND  ECONOMIC  SUCCESS  161 


the  practical  utility  of  an  American  public  institution 
may  be  gauged  to  some  extent  by  the  amount  of  public 
money  which  is  devoted  to  its  support  and  which  is  spent 
by  it.  The  growth  of  the  United  States  Department 
of  Agriculture  in  importance,  in  activity  and  in  general 
esteem  may  therefore  be  gauged  from  the  following 
extraordinary  figures: 


Expenditure  of  the  United  States  Department  of 


Agriculture. 


Year. 

Dols. 

In  1842 

1,000 

In  1850 

5,500 

In  1860 

40,000 

In  1870 

156,440 

In  1880 

199,500 

In  1890 

1,170,139 

In  1900 

3,625,851 

In  1910 

. .  16,976,022 

In  1916 

. .  28,031,540 

The  funds  voted  for  the  Department  of  Agriculture 
have  increased  nearly  two  hundredfold  since  1870  and 
nearly  eightfold  since  1900. 

Large  and  small  are  terms  of  comparison.  The  im¬ 
portance  of  the  amount  voted  to  the  Department  of 
Agriculture  may  be  seen  by  comparison  with  the  funds 
voted  by  Parliament  for  the  British  Board  of  Agriculture 
and  Fisheries.  The  two  Boards  compare  financially 
as  follows : 

Money  voted  for  the  United  States  Board  ]Dols.  £ 

of  Agriculture  in  1916  . .  ..  ..  28,031,540=5,606,308 

Money  voted  for  the  British  Board  of 
Agriculture  in  1916  . .  . .  . .  *  341,648 

Salaries  paid  by  United  States  Board  of 
Agriculture  in  1916  ..  ..  ..  10,436,792=2,087,358 

Salaries  paid  by  the  British  Board  of 
Agriculture  in  1916 


146,118 


162  EDUCATION  AND  ECONOMIC  SUCCESS 


The  United  States  Board  of  Agriculture  spent  in  1916 
fourteen  times  as  much  in  salaries  as  the  British  Board 
of  Agriculture,  and  spent  altogether  sixteen  times  as 
much  as  the  corresponding  British  institution. 

In  1903,  when  the  American  Board  of  Agriculture  was 
still  comparatively  small  and  unimportant,  when  it 
spent  only  about  £1,000,000  per  year,  or  less  than  one- 
fifth  as  much  as  it  is  spending  now,  the  Mosely  Educa¬ 
tional  Commission  visited  the  United  States.  Professor 
Henry  E.  Armstrong,  F.R.S.,  the  distinguished  chemist, 
accompanied  it,  and  he  reported  after  his  return : 

Science  in  the  Service  of  the  State. — The  most 
striking  illustrations  of  American  organising  ability  are 
to  be  met  with  at  Washington.  So  far  as  I  am  aware, 
there  is  nothing  anywhere  to  compare  with  the  way  in 
which  science  is  being  utilised  in  the  service  of  the  State 
by  the  U.S.  Department  of  Agriculture,  which  is  located 
in  the  capital.  .  .  . 

The  Department  now  comprises  the  following  branches : 

Office  of  the  Secretary. 

The  Weather  Bureau. 

Bureau  of  Animal  Industry. 

,,  Plant  Industry. 

,,  Forestry. 

„  Chemistry. 

,,  Soils. 

,,  Statistics. 

Division  of  Entomology. 

,,  Biological  Survey. 

,,  Accounts  and  Disbursements. 

,,  Publications. 

Office  of  Experimental  Stations. 

,,  Public  Road  Inquiries. 

Library. 

.  .  .  On  July  1,  1902,  the  staff  numbered  3,789,  of 
whom  1 ,209  were  executive  officers,  clerks  and  messengers, 
2,081  scientific  investigators,  and  499  labourers. 

The  Agricultural  Department  in  Washington  is  not 


EDUCATION  AND  ECONOMIC  SUCCESS  163 


merely  an  office — it  is  also  a  busy  hive  of  research.  A 
large  number  of  laboratories  are  attached  to  it,  in  which 
investigations  are  being  carried  on,  bearing,  in  one  way 
or  another,  on  problems  in  agriculture.  Much  research 
work  is  also  done  in  the  State  Experiment  Stations;  in 
the  main,  however,  these  serve  to  bring  under  the  notice 
of  farmers  the  importance  of  science  to  agriculture  by 
demonstrating  the  value  of  methods  of  cultivation, 
manures,  etc.  There  is  no  question  that  the  research 
work  done  under  the  auspices  of  the  Agricultural  Depart¬ 
ment  and  in  the  experiment  stations  is  of  the  very  greatest 
value,  and  is  contributing  most  materially  to  the  develop¬ 
ment  of  agricultural  industry.  To  take  only  one  illus¬ 
tration,  whereas,  in  1884,  the  amount  of  sugar  made 
from  sugar-beet  was  only  about  300  tons,  the  beet  crop 
of  the  past  year  is  estimated  to  yield  400,000  tons;  the 
amount  of  sugar  made  in  the  United  States  from  the 
sugar-cane  being  only  about  300,000  tons.  This  ex¬ 
traordinary  increase,  I  believe,  is  due  practically  entirely 
to  the  influence  exercised  from  Washington.  A  map 
showing  the  regions  in  which  the  temperature  conditions 
were  favourable  to  the  growth  of  the  sugar-beet  was 
first  prepared  by  Dr.  Wiley,  the  head  of  the  Bureau  of 
Chemistry.  Seed  was  then  issued  to  farmers  in  various 
districts,  together  with  directions  how  it  was  to  be  dealt 
with,  and  the  produce  was  subsequently  examined  for 
sugar;  in  this  way  it  was  determined  where  the  beet 
could  be  grown  successfully.  The  advantages  to  be 
derived  from  the  cultivation  of  the  crop  were  also  made 
clear  to  the  farmers.  An  industry  of  great  importance 
has  in  this  way  been  gradually  brought  into  existence; 
at  the  same  time,  farming  practice  has  been  vastly  im¬ 
proved  and  land  has  increased  considerably  in  value, 
owing  to  its  having  received  proper  treatment. 

The  Department  is  undoubtedly  exercising  an  extra¬ 
ordinary  influence  on  the  education  of  farmers  by  dis¬ 
tributing  literature  among  them,  and  by  encouraging 
and  helping  them  in  every  possible  way;  indeed,  it  is 
certain  that,  by  one  means  or  another,  the  American 
farmer  is  gradually  being  led  to  see  that  science  is  indis¬ 
pensable  to  agriculture.  .  .  . 

One  branch  of  work  initiated  in  the  Office  of  Experi- 


164  EDUCATION  AND  ECONOMIC  SUCCESS 


ment  Stations  at  Washington  of  extreme  importance, 
to  which  reference  should  also  be  made,  is  that  relating 
to  the  nutrition  of  man,  which  has  been  carried  out  in 
various  parts  of  the  States  under  the  supervision  of  my 
friend  Professor  Atwater — a  fellow-student  with  me  in 
Germany  in  years  gone  by — who  initiated  the  inquiry 
in  1877'.  The  scope  and  results  of  the  investigation  are 
described  in  the  Report  of  the  Director  of  Experiment 
Stations  for  the  year  ending  June,  1901.  Undoubtedly 
the  most  important  and  valuable  part  of  this  work  has 
been  that  done  during  recent  years  at  the  Wesleyan 
University,  Middletown,  Conn.,  where  a  large  respiration 
chamber  has  been  erected  and  brought  to  a  remarkable 
state  of  perfection  by  Professors  Atwater  and  Benedict. 
The  installation  is  a  very  costly  one.  It  is  possible  for 
a  man  to  live  within  this  chamber  for  days  or  even  weeks, 
and  for  account  to  be  kept  during  the  whole  time,  not 
only  of  the  products  of  respiration,  but  also  of  the  amount 
of  heat  given  out  and  the  oxygen  consumed,  with  a  degree 
of  accuracy  equal  to  that  with  which  ordinary  analyses 
are  carried  out  in  a  laboratory.  No  better  illustration 
can  be  given  of  the  amount  of  thought  and  care  which 
is  now  being  devoted  to  investigations  of  practical  im¬ 
portance  in  the  United  States.  I  went  specially  to 
Middletown  to  examine  the  apparatus,  and  was  gratified 
beyond  measure,  to  see  it  alone  was  worth  a  pilgrimage 
to  America.  The  investigations  which  can  be  carried 
out  with  such  a  chamber  are  of  far-reaching  importance, 
and  touch  very  closely  on  the  domain  of  household 
economics.  It  is  much  to  be  desired  that  we,  on  this 
side,  should  be  able  to  do  similar  work. 

The  Geological  Survey  is  also  a  well- organised  depart¬ 
ment  in  Washington.  The  wealth  of  material  at  the 
disposal  of  American  geologists  is  extraordinary.  If 
opportunity  beget  supply,  we  may  look  to  America  as 
the  breeding-ground  of  geologists  in  the  future.  Besides 
field  work  and  the  attendant  office  work,  the  department 
now  carries  on  scientific  research  work  on  geological 
problems.  It  has  a  well-equipped  Chemical  Department, 
at  the  head  of  which  is  Professor  Clarke,  who  a  few  months 
ago  delivered  in  Manchester  the  lecture  commemorative 
of  the  centenary  of  Dalton’s  atomic  theory.  Much 


EDUCATION  AND  ECONOMIC  SUCCESS  1 65 


valuable  work  has  been  done  in  this  department,  which 
is  now  quite  the  seat  of  authority  in  mineral  analysis, 
Dr.  Hillebrand,  the  senior  member  of  Professor  Clarke’s 
staff,  being  probably  the  most  accomplished  and  experi¬ 
enced  analyst  of  the  day/ 

Lastly,  it  may  be  mentioned  that  a  Bureau  of  Standards 
has  recently  been  established  at  Washington  to  do  work 
on  the  lines  of  that  done  by  our  Standards  Department, 
the  Board  of  Trade  and  the  National  Physical  Laboratory, 
but  with  a  wider  outlook  than  any  of  these  and  well 
provided  with  funds. 

When  we  consider  how  unco-ordinated  our  efforts  are, 
how  little  public  appreciation  exists  of  the  value  of 
science  to  the  community,  it  is  impossible  not  to  feel 
envious  of  what  is  going  on  in  Washington.  It  would 
well  repay  us  to  inquire  very  fully  into  the  causes  which 
have  operated  to  produce  a  willingness  in  America  to 
listen  to  counsel  wkich  here  passes  altogether  unheeded. 
Something  must  be  done  to  create  a  public  belief  in  the 
value  of  knowledge,  which  will  lead  us  to  co-ordinate 
our  scattered  efforts.  So  long  as  our  outlook  is  merely 
insular,  the  future  may  appear  to  afford  little  promise; 
but  if  we  consider  the  possibilities  the  Empire  affords, 
there  is  no  reason  why  our  outlook  should  not  be  as 
hopeful  as  that  of  the  United  States.  The  resources  at 
our  disposal,  the  agricultural  possibilities  within  the 
Empire,  may  well  be  regarded  as  boundless;  but  we  need 
to  make  ourselves  acquainted  with  them  and  to  take 
concerted  measures  to  exploit  them.  To  this  end,  it 
is  all-important  to  constitute  effective  central  organisa¬ 
tions  in  this  country  similar  to  those  which  exist  in  the 
United  States. 

In  1902,  when  the  United  States  Department  of  Agri¬ 
culture  spent  only  about  £1,000,000  per  year,  it  had  a 
staff  of  nearly  4,000,  of  whom  more  than  2,000  were 
scientific  investigators.  Since  then  the  staff  has  been 
more  than  quadrupled.  The  United  States  Secretary 
of  Agriculture  commands  now  a  veritable  army  of  experts. 

A  University  has  a  twofold  purpose:  research  and 

U 


166  EDUCATION  AND  ECONOMIC  SUCCESS 


tuition.  The  United  States  Board  of  Agriculture  acts 
like  a  gigantic  University.  It  carries  out  research  by 
thousands  of  experts  of  its  own.  In  addition,  research 
is  carried  on  independently  by  thousands  of  experts 
employed  by  the  richly  endowed  Departments  of  Agri¬ 
culture  belonging  to  the  individual  States.  The  results 
of  these  investigations  and  of  the  experiments  made  by 
private  societies  and  individuals  are  collected,  sifted  and 
classified  at  Washington,  and  are  then  communicated 
to  the  agriculturists  by  means  of  pamphlets,  books,  etc. 
As  adjectives  do  not  suffice  to  describe  the  colossal 
literary  activity,  the  teaching  activity,  of  the  United 
States  Board  of  Agriculture,  I  would  endeavour  to  des- 
scribe  it  by  means  of  figures.  Mr.  J.  A.  Arnold,  the 
Chief  of  the  Division  of  Publications,  in  his  Report  for 
1910,  stated  that  in  the  course  of  that  year  the  United 
States  Board  of  Agriculture  issued  1,983  publications 
which  together  contained  42,503  pages.  The  number 
of  pages  published  in  that  single  year  by  the  American 
agricultural  authorities  was  twice  as  great  as  the  number 
of  pages  contained  in  the  Encyclopcedia  Britannica. 
The  entire  literature  published  in  1910  by  the  Board  of 
Agriculture  came  to  25,190,469  copies,  of  which  4,424,300 
were  issued  by  the  Bureau  of  Plant  Industry,  4,034,000 
by  the  Office  of  Experiments  Stations,  1,703,225  by  the 
Bureau  of  Animal  Industry,  etc.  Commenting  upon  this 
incredible  and  almost  unimaginable  output,  Mr.  Arnold 
stated : 

No  other  Government  publishes  as  many  public  docu¬ 
ments  as  the  United  States,  and  no  other  executive 
department  of  the  Government  issues  as  many  publica¬ 
tions  as  the  Department  of  Agriculture.  It  is  the  function 
of  this  Department  to  acquire  and  disseminate  useful 
information  in  regard  to  agriculture.  With  the  rapid 
increase  in  population  of  the  country,  and  the  consequent 


EDUCATION  AND  ECONOMIC  SUCCESS  167 


increasing  demand  for  publications,  it  became  apparent 
many  years  ago  that  the  Department  could  probably 
never  secure  an  appropriation  sufficient  for  printing 
enough  documents  to  supply  the  demand.  Congress 
has,  however,  provided  a  solution  of  the  problem  by 
authorising  the  sale  of  Government  publications  at  a 
nominal  price.  Under  the  operation  of  a  provision  of 
the  law,  the  Superintendent  of  Documents  can  reprint 
and  sell  any  publication,  so  long  as  there  is  a  demand  for 
it,  without  any  expense  to  this  Department.  Conse¬ 
quently,  by  paying  the  price  affixed  by  law,  applicants 
are  able  to  secure  documents  which  can  no  longer  be 
obtained  from  the  Department,  and  which  would  not 
otherwise  be  available,  owing  to  the  insufficiency  of  the 
department’s  fund  for  printing  additional  copies. 

The  United  States  Department  of  Agriculture  teaches 
not  only  by  means  of  its  publications — it  might  fitly  be 
described  as  the  greatest  correspondence  school  in  the 
world — but  also  by  lecturing,  as  does  every  University. 
However,  while  at  the  Universities  the  students  have  to 
come  to  the  lecturers,  the  lecturers  and  demonstrators 
of  the  Department  of  Agriculture  go  to  the  agriculturists. 
The  United  States  Department  of  Agriculture  found  it 
particularly  difficult  to  improve  cultivation  among  the 
backward  and  largely  illiterate  negroes  in  the  South. 
Therefore  it  resolved  to  reform  their  methods  by  “  agents 
in  the  field”;  and  as  negroes  are  often  extremely  sus¬ 
picious  of  white  men  when  they  come  offering  them 
advice  for  nothing,  many  coloured  lecturers  and  demon¬ 
strators  are  especially  trained  for  the  purpose.  In  his 
Report  for  1910  the  Secretary  of  Agriculture  stated  with 
regard  to  the  activity  of  his  Department  in  the  South : 

From  1904  to  1909  there  was  an  increase  from  1  to 
362  agents  in  the  field.  The  number  has  now  reached 
460,  and  the  demand  for  more  is  urgent.  More  than 
75,000  farmers  are  receiving  direct  instruction  on  their 
farms.  .  .  . 


168  EDUCATION  AND  ECONOMIC  SUCCESS 


It  has  been  found  by  experience  that  the  only  way  to 
reach  some  farmers  and  to  get  them  to  follow  better 
methods  of  farming  is  through  their  boys.  Where  a 
farmer’s  boy  has  been  enlisted  in  a  corn  club  and  pro¬ 
duced  on  his  father’s  farm  an  acre  of  corn  yielding  from 
50  to  200  bushels  at  a  cost  of  not  more  than  30  cents  a 
bushel,  the  farmer  is  no  longer  sceptical  about  improved 
farm  methods. 

In  1909  there  were  10,543  boys  enrolled  in  these  clubs. 
In  1910  the  number  has  increased  to  46,225.  This 
feature  of  the  work  has  aroused  unbounded  interest  and 
enthusiasm  and  turned  attention  toward  the  farm. 
Public-spirited  citizens  in  the  various  Southern  States 
have  contributed  $40,000  for  prizes  for  these  boys.  Prize¬ 
winners  in  four  States  were  given  trips  to  Washington 
and  awarded  diplomas  of  merit.  This  year  such  trips 
are  offered  from  every  Southern  State  through  bankers’ 
associations,  boards  of  trade,  educational  associations, 
private  citizens,  and  state  fairs.  Governors  and  super¬ 
intendents  of  public  instruction  will  give  diplomas  similar 
to  those  earned  last  year  to  all  boys  who  make  excellent 
records. 

When  a  boy  makes  a  thorough  study  of  corn  it  is  easier 
to  succeed  with  other  crops.  Some  of  the  boys  in  the 
boll-weevil  parishes  of  Louisiana  have  not  only  broken 
the  records  in  corn  production  there,  but  have  achieved 
the  same  extraordinary  results  with  cotton,  potatoes, 
onions,  and  other  crops. 

Marked  changes  in  general  farm  methods  and  in  the 
economic  life  of  the  people  do  not  take  place  in  a  single 
year.  The  few  demonstrations  in  each  neighbourhood 
the  first  year  attract  attention  and  dispel  doubt,  the 
second  year  brings  increasing  success,  and  the  third  year 
usually  marks  the  beginning  of  the  general  adoption  of 
the  changed  methods,  though  time  is  required  to  make  the 
adoption  universal  and  thorough  in  a  community. 

Consecutive  Secretaries  of  Agriculture  have  commented 
on  the  practical  utility  of  their  Departments  with  justi¬ 
fiable  pride.  For  instance,  the  Secretary  of  Agriculture 
stated  in  his  Report  of  1906: 


EDUCATION  AND  ECONOMIC  SUCCESS  160 


The  work  of  the  Department  of  Agriculture  has  already 
had  results  which  are  valued  at  hundreds  of  millions  of 
dollars  annually,  and  yet  the  Department  feels  that  it 
has  barely  crossed  the  threshold  of  its  mission  of  dis¬ 
covery  and  education.  Co-operating  to  the  same  ends 
are  sixty  Experiment  Stations  in  fifty-one  States  and 
territories,  the  sixty-three  Agricultural  Colleges,  thousands 
of  farmers  institute  meetings  yearly,  many  excellent 
agricultural  periodical  publications,  and  new  instructive 
books.  Then  there  is  a  new  line  of  work  which  is  so 
productive  of  results  that  it  is  constantly  extending,  and 
that  is  the  Demonstration  Farm,  the  encouragement  of 
individual  farmers  to  change  their  agriculture  so  as  to 
multiply  their  yield  and  their  profits,  and  thus  afford 
object-lessons  to  other  farmers.  Thus  it  appears  that 
forces  are  now  at  work  which  will  very  considerably 
increase  the  production  of  the  farms  within  a  generation, 
and  which  promise  to  continue  that  increase  indefinitely. 

The  sterling  worth  of  the  educational  work  done  by  the 
United  States  Department  of  Agriculture  has  been 
gratefully  recognised  by  America’s  ablest  statesmen. 
For  instance,  President  Roosevelt  stated  at  Sioux  Falls : 

The  Department  of  Agriculture  devotes  its  whole 
energy  to  working  for  the  welfare  of  farmers  and  stock- 
growers.  In  every  section  of  our  country  it  aids  them  in 
their  constantly  increasing  search  for  a  better  agricul¬ 
tural  education.  It  helps  not  only  them,  but  all  the 
nation,  in  seeing  that  our  exports  of  meats  have  clean 
bills  of  health,  and  that  there  is  rigid  inspection  of  all 
meats  that  enter  into  inter-State  commerce.  Thirty- 
eight  million  carcasses  were  inspected  during  the  last 
fiscal  year.  Our  stock-growers  sell  forty- five  million 
dollars’  worth  of  live-stock  annually,  and  these  animals 
must  be  kept  healthy  or  else  our  people  will  lose  their 
trade.  Our  exports  of  plant  products  to  foreign  countries 
amount  to  over  six  hundred  million  dollars  a  year,  and 
there  is  no  branch  of  its  work  to  which  the  Department 
of  Agriculture  devotes  more  care.  Thus  the  Department 
has  been  successfully  introducing  a  macaroni  wheat  from 


170  EDUCATION  AND  ECONOMIC  SUCCESS 


the  headwaters  of  the  Volga,  which  grows  successfully 
in  ten  inches  of  rainfall,  and  by  this  means  wheat-growing 
has  been  successfully  extended  westward  into  the  semi- 
arid  region.  Two  million  bushels  of  this  wheat  were 
grown  last  year ;  and  being  suited  to  dry  conditions,  it 
can  be  used  for  forage  as  well  as  for  food  for  man. 

The  Department  of  Agriculture  has  been  helping  our 
fruit  men  to  establish  markets  abroad  by  studying 
methods  of  fruit  preservation  through  refrigeration  and 
through  methods  of  handling  and  packing.  On  the  Gulf 
coasts  of  Louisiana  and  Texas,  thanks  to  the  Department 
of  Agriculture,  a  rice  suitable  to  the  region  was  imported 
from  the  Orient,  and  the  rice  crop  is  now  practically 
equal  to  our  needs  in  this  country,  whereas  a  few  years 
ago  it  supplied  but  one-fourth  of  them.  The  most 
important  of  our  farm  products  is  the  grass  crop ;  and  to 
show  what  has  been  done  with  grasses,  I  need  only  allude 
to  the  striking  change  made  in  the  entire  West  by  the 
extended  use  of  alfalfa. 

Moreover,  the  Department  has  taken  the  lead  in  the 
effort  to  prevent  the  deforestation  of  the  country.  Where 
there  are  forests  we  seek  to  preserve  them;  and  on  the 
once  treeless  plains  and  the  prairies  we  are  doing  our 
best  to  foster  the  habit  of  tree-planting  among  our  people. 
In  my  own  lifetime  I  have  seen  wonderful  changes  brought 
about  by  this  tree-planting  here  in  your  own  State  and  in 
the  States  immediately  around  it. 

On  December  3,  1901,  President  Roosevelt  stated  in 
his  “  Messages  to  Congress  ”  : 

The  Department  of  Agriculture  during  the  past  fifteen 
years  has  steadily  broadened  its  work  on  economic  lines, 
and  has  accomplished  results  of  real  value  in  upbuilding 
domestic  and  foreign  trade.  It  has  gone  into  new  fields 
until  it  is  now  in  touch  with  all  sections  of  our  country 
and  with  two  of  the  island  groups  that  have  lately  come 
under  our  jurisdiction,  whose  people  must  look  to  agri¬ 
culture  as  a  livelihood.  It  is  searching  the  world  for 
grains,  grasses,  fruits  and  vegetables  specially  fitted  for 
introduction  into  localities  in  the  several  States  and 
territories  where  they  may  add  materially  to  our  resources. 


EDUCATION  AND  ECONOMIC  SUCCESS  171 


By  scientific  attention  to  soil  survey  and  possible  new 
crops,  to  breeding  of  new  varieties  of  plants,  to  experi¬ 
mental  shipments,  to  animal  industry  and  applied  chemis¬ 
try,  very  practical  aid  has  been  given  our  farming  and 
stock-growing  interests.  The  products  of  the  farm  have 
taken  an  unprecedented  place  in  our  export  trade  during 
the  year  that  has  just  closed. 

The  United  States  Industrial  Commission  of  1902 
reported : 

Agriculture  has  derived  more  benefit  from  the  establish¬ 
ment  of  the  Department  of  Agriculture  and  from  its 
administrative  work  than  from  any  of  our  Federal 
legislation.  The  annual  injury  to  fruit  and  grain  from 
the  ravages  of  insects  would  probably  be  double  what 
it  is  now  but  for  the  work  of  the  Department.  The 
distribution  of  weather  forecasts  has  been  of  incalculable 
value  in  aiding  farmers  to  give  timely  care  to  crops. 
Its  experiments  in  proving  the  adaptation  of  crops  to 
climates  and  soils  have  developed  agriculture  into  a  science, 
and  thus  alike  benefited  the  industry  and  the  country 
in  general. 

It  would  be  easy  to  fill  a  large  volume  with  similar 
pronouncements  made  by  the  most  eminent  American 
statesmen  and  the  leading  agriculturists. 

The  United  States  Department  of  Agriculture  has  for 
many  years,  through  its  Bureau  of  Chemistry,  made 
exhaustive  investigations  relating  to  the  adulteration  of 
food  and  to  the  effect  of  the  various  preservatives  used 
upon  the  human  system.  These  investigations  are  carried 
on  not  only  by  chemical  analyses  made  in  the  laboratory 
but  also  by  practical  experiments  made  upon  men.  The 
Department  of  Agriculture  has  in  its  employment  a 
number  of  selected  young  men,  mostly  chemical  enthu¬ 
siasts,  called  “  The  Poison  Squad,”  who  submit  them¬ 
selves  cheerfully  to  lengthy  and  dangerous  tests,  including 


172  EDUCATION  AND  ECONOMIC  SUCCESS 


the  taking  of  adulterated  foods  and  preservatives,  for 
the  benefit  of  science  and  of  the  human  race. 

Other  departments  of  the  Federal  Government  and  of 
the  Governments  of  the  individual  States  resemble  the 
United  States  Department  of  Agriculture  by  their  ener¬ 
getic  and  useful  activities.  The  industrial  and  commercial 
interests  of  the  United  States  have  been  vastly  benefited 
by  the  scientific  branches  of  the  Department  of  Commerce 
and  Labour,  by  the  excellent  Patent  Office,  which  Great 
Britain  might  copy  with  advantage,  and  by  the  ably 
directed  Bureau  of  Standards.  The  efficiency  of  the 
American  railways  has  been  vastly  increased  by  the 
Inter-State  Commerce  Commission,  which  has  abolished 
the  unfair  discriminations  which  formerly  prevailed  in 
favour  of  large  shippers  and  of  certain  localities.  That 
Commission  has  brought  about  uniformity  in  railway 
equipment,  uniformity  and  lucidity  of  railway  accounting, 
the  introduction  of  an  excellent  automatic  signalling 
system,  of  automatic  couplers  on  the  railways,  etc.,  and 
its  utility  has  been  gratefully  acknowledged  even  by  the 
railways  themselves.  The  funds  voted  for  the  Inter- 
State  Commerce  Commission  have  increased  from 
$242,914  in  1900  to  $5,016,136  in  1916.  The  investiga¬ 
tions  and  publications  of  the  Geological  Survey  are  in¬ 
valuable  to  all  who  are  interested  in  mining.  All  these 
scientific  services  are  lavishly  endowed  with  funds. 
Altogether  the  Federal  Government  spends  on  the 
principally  scientific  services  about  £10,000,000  per 
year. 

The  United  States  Government  and  the  Governments 
of  the  single  States  try  to  educate  the  grown-up  in  the 
best  and  most  scientific  methods  of  business,  not  only  by 
tuition,  but  also  by  example.  Most  of  the  great  Govern¬ 
ment  Departments  are  run  like  large,  well-organised 
businesses.  They  are  models  of  administrative  efficiency. 


EDUCATION  AND  ECONOMIC  SUCCESS  17:5 


The  American  Government  offices  are  staffed,  not  with 
dull  bureaucratic  automatons,  not  with  human  derelicts 
and  petrefacts,  but  with  keen,  open-minded  and  striving 
business  men.  While  the  productive  Government  under¬ 
takings  of  Europe  are,  as  a  rule,  models  of  waste  and 
of  bureaucratic  incompetence,  many  of  the  American 
Government  undertakings  are  executed  with  extra¬ 
ordinary  ability,  rapidity  and  efficiency  at  surprisingly 
low  cost.  The  Panama  Canal,  many  of  the  great  irrigation 
works  in  all  parts  of  the  Union,  the  regulation  of  river 
courses,  etc.,  have  been  executed  by  the  Federal  Govern¬ 
ments,  through  the  Army  Engineers  with  such  ability 
and  at  so  low  a  cost  as  to  be  a  model  to  private  engineers 
and  contractors.  The  Government  Printing  Works  at 
Washington  are  probably  the  largest  and  the  most 
efficient  printers  in  the  world,  etc. 

The  wealth  of  nations  depends  obviously  less  on  the 
possession  of  great  natural  resources  than  on  the  ability 
and  activity  of  the  men  who  exploit  them.  While  a 
good  general  and  classical  education,  given  on  traditional 
lines,  produces  men  of  culture  who  may  be  delightful 
talkers  and , companions,  but  who  may  possess  no  par¬ 
ticular  qualification  for  assisting  or  directing  the  produc¬ 
tion  of  wealth,  a  good  practical  and  scientific  education, 
given  to  the  largest  possible  number  of  people,  is  a  most 
powerful  instrument  for  achieving  national  economic 
success.  In  a  world  in  which  scientific  production, 
scientific  transport  and  scientific  commerce  have  become 
general,  success  falls  naturally  to  trained  scientific  ability. 
The  rapid  and  vast  industrial  progress  of  the  United 
States  and  of  Germany  is  largely  due  to  the  general 
appreciation  and  the  energetic  promotion  of  education, 
while  England’s  industrial  backwardness  is  largely  due 
to  indifference  to  education  on  the  part  of  both  masters 
and  men.  After  all,  rough  unskilled  workers  can  only 


174  EDUCATION  AND  ECONOMIC  SUCCESS 


do  rough  and  unskilled  work.  We  read  in  the  Report 
on  Technical  Education  published  by  the  United  States 
Commissioner  of  Labour  in  1902: 

To  determine  the  progress  of  trade  education  in  Europe 
during  the  last  two  or  three  decades  one  turns  to  Germany 
rather  than  to  any  other  country,  because  of  the  great 
impetus  that  trade  education  has  there  received,  and 
because  its  development  has  corresponded  with  a  most 
remarkable  advance  of  pure  scientific  knowledge  on  the 
one  hand  and  of  industry  on  the  other.  It  is  inevitable 
that  some  causal  connection  should  be  seen  between 
these  two  conditions.  .  .  . 

All  English  teachers  deplore  the  lack  of  enthusiasm 
for  education  among  all  classes.  ...  A  serious  obstacle 
to  the  progress  of  technical  education  is  the  indifference 
of  employers.  .  .  .  Another  very  serious  obstacle — in 
fact,  the  most  serious  of  all — is  the  poor  general  educa¬ 
tion  of  the  English  workman.  Nearly  all  of  the  artisan 
class  leave  school  at  twelve  or  thirteen,  and  after  earning 
small  amounts  in  doing  odd  jobs  about  the  streets  or  in 
factories,  settle  down  at  fifteen  or  sixteen  as  general 
labourers  or  factory  operatives,  or  enter  upon  the  learning 
of  a  trade.  When  they  go  to  the  evening  technical 
classes  at  fifteen  or  sixteen,  they  have  forgotten  much 
of  what  they  knew  upon  leaving  the  elementary  school. 

In  winter,  1903,  the  late  Mr.  Alfred  Mosely,  a  retired 
merchant,  sent  to  the  United  States  at  his  own  expense 
a  Commission  of  experts,  who  were  asked  to  study  and  to 
compare  the  British  and  American  educational  systems 
and  to  express  their  opinion  in  writing.  Mr.  Mosely 
himself  reported : 

One  of  the  things  that  struck  me,  all  through  the 
United  States,  was  the  large  amount  of  money  devoted 
to  educational  purposes,  the  buildings  being  magnificent 
and  the  equipment  lavish.  The  teachers  seemed  fired 
with  enthusiasm,  and  there  is  a  thirst  for  knowledge 
shown  by  pupils  of  all  ages  which  is  largely  lacking  in 
our  own  country.  In  contrast  to  our  education,  which 


EDUCATION  AND  ECONOMIC  SUCCESS  175 


has  to  a  large  extent  been  “  classical,”  I  found  that  in 
America  it  is  the  “  practical  ”  subjects  which  are  prin¬ 
cipally  taught,  and  technical  classes  and  schools  are  to 
be  found  everywhere.  There  are  also  excellent  oppor¬ 
tunities  for  those  going  into  the  professions  to  take  up 
classical  subjects;  but  with  the  ordinary  “everyday” 
boy  who  has  to  fight  his  way  in  the  world  the  bulk  of  the 
time  is  devoted  to  practical  subjects  likely  to  be  of  most 
use  to  him  in  after-life.  American  boys  remain  at  school 
much  longer  than  is  the  case  here,  often,  in  addition, 
passing  through  to  the  secondary  schools  and  colleges  at 
little  or  no  expense  to  their  parents  or  themselves.  .  .  . 

My  observations  lead  me  to  believe  that  the  average 
American  boy  when  he  leaves  school  is  infinitely  better 
fitted  for  his  vocation  and  struggle  in  life  than  the  English 
boy,  and  in  consequence  there  are  in  the  United  States 
a  smaller  proportion  of  “  failures,”  and  fewer  who  slide 
downhill  and  eventually  join  the  pauper,  criminal,  or  “  sub¬ 
merged  tenth  ”  class.  The  aim  of  education  in  America 
is  to  make  every  boy  fit  for  some  definite  calling  in  life, 
and  my  own  experience  leads  me  to  think  that  nearly 
every  lad,  if  properly  trained,  is  fit  for  something.  .  .  . 

Another  point  that  struck  me  was  the  intense  belief 
of  the  Americans  in  the  education  of  the  masses.  They 
feel  that  their  country  cannot  progress  and  prosper  with¬ 
out  it.  .  .  .  Further,  from  a  purely  business  point  of 
view,  Americans  see  in  the  money  spent  on  education 
a  magnificent  investment  for  their  country.  .  .  . 

Again,  whilst  British  rich  men  spend  large  sums  upon 
sport  of  various  kinds,  it  appears  to  be  the  hobby  of 
moneyed  Americans  to  devote  enormous  amounts  of 
money  to  the  endowment  and  equipment  of  various 
educational  institutions.  They  pass  their  lives  in  strenu¬ 
ous  work,  and  their  labours  in  building  up  industries  and 
developing  territory  are  of  infinite  value  to  their  people, 
recalling  what  was  the  ideal  of  the  late  Cecil  Rhodes  — 
viz.,  that  the  truest  philanthropy  consists  in  creating 
industries  and  fields  of  industry  to  occupy  the  masses 
and  afford  them  remunerative  employment.  .  .  . 
^Personally  I  credit  the  American  nation  with  an  intense 
ambition  not  only  to  raise  themselves  individually,  but 
also  to  use  their  efforts  for  the  raising  of  their  fellows  and 


176  EDUCATION  AND  ECONOMIC  SUCCESS 


for  the  furtherance  of  civilisation.  ...  I  have  heard 
it  urged  that  in  America  there  is  no  aristocracy  but  that 
of  money.  I  beg  to  differ.  The  contention  may  on  the 
surface  appear  to  be  true,  but  if  the  matter  be  probed  a 
little  deeper  it  will  be  found  that  in  reality  the  aristocracy 
of  money  is  an  aristocracy  of  brains . 

Mr.  E.  W.  Black,  Mayor  of  Nottingham  and  Chairman 
of  the  Nottingham  Education  Committee,  reported: 

The  great  facts  remaining  with  me  as  the  result  of  my 
educational  investigations  in  America  are  — 

(1)  That  public  opinion  is  much  more  strongly  in 
favour  of  education  than  in  this  country ; 

(2)  That  the  scholars  in  America  take  a  keener  interest 
in  their  studies  than  is  generally  apparent  here ;  and 

(3)  That  the  teaching  given  in  the  elementary  schools 
produces  a  mental  alertness  and  readiness  of  mind  to  a 
greater  extent  than  is  secured  in  this  country. 

The  people  of  America  believe  in  education,  and  they 
are  willing  to  pay  for  it.  They  regard  it  as  an  invest¬ 
ment  of  their  money  on  which  they  get  a  good  return. 
The  people  of  England  are  only  half-persuaded  of  the 
value  of  education,  and  there  are  still  many  who  regard 
even  the  present  expenditure  as  extravagant.  .  .  . 

In  England  the  great  majority  of  the  children  leave 
school  at  the  earliest  possible  moment;  they  go  out  to 
work  to  help  to  increase  the  family  income.  In  America 
the  children  stay  longer  at  school,  and  one  of  the  leading 
educational  experts  in  America  said  to  me,  “  We  find 
that  there  is  a  direct  ratio  between  the  number  of  years 
spent  in  school  and  the  productive  capacity  of  the  scholars 
in  dollars  and  cents.” 

Professor  Papillon  stated : 

To  sum  up :  what  has  struck  me  most  forcibly  in  a  short 
and  imperfect  survey  of  a  wide  field  is  first  of  all  the 
attitude  of  the  American  people  towards  public  education 
as  a  prime  necessity  of  national  life,  for  which  hardly  any 
expenditure  can  be  too  great;  and  next  its  eminently 
practical  popular  character.  .  .  . 


EDUCATION  AND  ECONOMIC  SUCCESS  177 


The  educational  systems  of  America  have  the  merits 
and  defects  of  much  else  in  that  great,  but  as  yet  un¬ 
finished,  country.  They  are  full  of  life  and  energy; 
freely,  not  to  say  rashly,  experimental;  innovating, 
renewing,  abandoning,  sacrificing,  now  one  point,  now 
another,  whether  of  ideas  or  practice,  in  the  effort  at 
growth  and  development.  They  are  less  systematically 
and  scientifically  thought  out  beforehand  than  the  more 
symmetrical  systems  of  Continental  Europe;  but  they 
are,  perhaps,  for  that  very  reason,  more  suggestive  to 
ourselves,  to  a  free  people  feeling  its  way  along  the  same 
road. 

Councillor  John  Whitburn,  of  the  Newcastle-on-Tyne 
Education  Committee,  reported: 

I  spent  some  days  with  125  officers  of  the  Cash  Register 
Works,  and  found  that  everyone  had  received  a  good 
education  of  some  sort.  I  was  assured  by  the  chief  of  the 
Inventions  Department  of  that  concern  that  “  the  best 
and  most  of  their  inventions  and  improvements  of 
machinery  were  brought  about  by  those  who  were  best 
educated  and  who  were  able  to  embody  their  ideas  in  a 
creditable  drawing.”  This  is  the  sort  of  testimony  one 
meets  with  on  every  hand.  In  the  United  States,  more 
than  in  any  other  country,  one  finds  that  the  business 
man  is  also  an  educator,  and  that  the  educator  is  a 
business  man  also.  .  .  . 

The  American  business  man  is  more  often  an  educa¬ 
tionalist  than  an  active  politician.  Nearly  every  large 
industrial  concern  has  some  sort  of  educational  centre,  or 
department,  into  which  is  directed  an  enormous  amount  of 
money  and  personal  energy.  The  money  spent  on  public 
education  by  no  means  represents  the  whole  effort  of  the 
nation  to  raise  itself  to  a  higher  intellectual  level.  .  .  . 

As  the  result  of  his  superior  education,  the  American 
workman  requires  less  supervision  and  direction  than  is 
customary  in  this  country.  ...  So  eager  are  the 
American  workmen  to  acquire  a  technical  knowledge  of 
their  trades  that  the  authorities  of  the  Pratt  Institute 
informed  us  that  they  were  reluctantly  compelled  to 
refuse  one-half  of  those  who  applied  for  admission  to 


178  EDUCATION  AND  ECONOMIC  SUCCESS 


their  classes  for  engineering  drawing.  This  great  insti¬ 
tution  employs  no  fewer  than  115  teachers. 

American  industrial  progress  is  due  more  than  any¬ 
thing  else  to  the  determination  shown  by  the  American 
working  classes  to  equip  themselves  in  the  most  thorough¬ 
going  fashion.  Hundreds  of  employers  testify  to  the 
fact  that  there  has  been  an  improvement  in  the  quality 
of  the  work  and  an  increase  in  the  quantity  of  the  output 
as  the  result  of  technical  education.  .  .  .  Mr.  Johnson, 
Director  of  the  Baldwin  Locomotive  Works,  informed  me 
that  the  trade  and  manual  training  schools  are  indis¬ 
pensable,  whilst  the  technical  schools  have  made  the 
country  great.  .  .  . 

On  every  hand  I  saw  the  evidence  of  a  scientific  and 
technical  training  in  industrial  operations.  At  the 
National  Cash  Register  Works  I  saw  machines  in  opera¬ 
tion  which  take  103  separate  cutting  and  boring  tools, 
and  I  was  assured  that  these  machines  were  all  evolved 
by  their  own  employees.  .  .  .  There  is  urgent  need  for 
all  those  who  are  in  any  way  concerned  about  the  future 
of  the  British  industries  to  give  the  most  earnest  con¬ 
sideration  to  the  question  of  the  practical  education  of 
our  artisan  class.  .  .  . 

I  spent  the  last  three  weeks  of  my  time  in  the  United 
States  in  visiting  a  large  number  of  industrial  concerns 
and  in  studying  the  conditions  under  which  the  working 
people  of  the  country  live  and  labour.  I  formed  a  very 
high  opinion  of  the  American  workers  of  both  sexes. 
The  men  are  alert,  highly  intelligent,  sober  and  self- 
respecting  in  the  highest  degree.  The  American  workman 
is  invariably  courteous  and  accommodating — in  a  word, 
a  gentleman.  With  respect  to  the  women  who  work  for 
a  living,  I  have  been  delighted  to  observe  the  evidence 
of  a  superior  culture  of  the  intellect  and  character.  .  .  . 
The  far-seeing  American  employer  recognises  that  there 
is  a  substantial  economic  value  behind  every  reform  which 
contributes  to  the  intellectual  vigour  and  the  personal 
comfort  and  happiness  of  every  employee. 

The  English  educational  system  is  grossly  inefficient. 
It  does  not  adequately  prepare  the  people  for  the  struggle 


EDUCATION  AND  ECONOMIC  SUCCESS  179 


of  life.  It  creates  inefficient  leaders  and  an  equally 
inefficient  rank  and  file.  Professor  Huxley  wrote  many 
years  ago:  “We  study  in  these  days  not  to  know,  but  to 
pass,  the  consequence  being  that  we  pass  and  don’t  know.” 
That  is,  unfortunately,  still  true.  British  education  is 
largely  a  sham  which  creates  sham  experts  and  sham 
leaders . 

The  United  States  owe  their  vast  wealth  not  merely 
to  the  great  extent  of  their  territory  and  of  the  natural 
resources  contained  in  it,  but  also,  and  particularly,  to 
the  energy  and  ability  with  which  the  resources  of  nature 
have  been  exploited  by  the  people.  The  energy  and 
ability  of  the  American  people  are  very  largely  due  to  the 
practical  and  thorough  education  and  training  which 
they  have  received.  Their  abilities  are  rather  acquired 
than  inborn.  America’s  economic  success  is  largely  due 
to  the  fact  that,  in  the  words  of  the  late  Mr.  Choate, 
“  education  js  the  chief  industry  of  the  nation.”  The 
territory  and  the  resources  of  the  British  Empire  are 
vastly  greater  than  those  of  the  United  States.  The 
British  Empire  may  therefore  far  exceed  the  United  States 
in  white  inhabitants,  in  agriculture,  in  the  manufacturing 
industries,  in  wealth  and  in  power,  if  the  British  people  are 
willing  to  learn  from  America’s  example. 


CHAPTER  VII 

LABOUR  AND  CAPITAL  AFTER  THE  WAR  * 

It  is  generally  agreed  that  the  present  War  will  open  a 
new  chapter  in  the  history  of  the  world.  At  its  conclusion 
the  present  generation  will  be  faced  with  a  number  of 
most  important  problems,  the  solution  of  which  will 
affect  future  generations  for  centuries  to  come.  It  will 
give  rise  to  a  new  set  of  conditions  in  the  relations  between 
the  nations  of  the  world.  It  may  permanently  affect  the 
relations  between  rulers  and  ruled.  It  is  bound  to 
revolutionise  completely  economic  conditions,  and  particu¬ 
larly  the  relations  between  labour  and  capital.  At  the 
end  of  the  War  all  the  combatant  nations  will  be  left  with 
a  staggering  burden  of  war  debts.  Demobilisation  will 
have  to  take  place  gradually,  and  will  be  very  costly. 
Great  Britain  will  have  a  National  Debt  amounting  at 
least  to  £10,000,000,000.  It  remains  to  be  seen  whether 
the  vast  sums  lent  to  Britain’s  Allies  can  be  repaid,  and 
whether  substantial  indemnities  can  be  obtained  from 
Germany  and  her  Allies.  As  Belgium,  France,  Serbia, 
Rumania,  Poland  and  Russia,  whose  territories  have  been 
devastated,  have  naturally  the  first  claim  upon  such 
indemnities,  little  may  be  left  to  satisfy  the  claims  of 
Great  Britain. 

The  British  Empire  is  in  the  happy  position  that  it 
possesses  in  the  Dominions  and  Colonies  unlimited  latent 
wealth.  A  century  ago  the  Overseas  possessions  of  this 

*  From  The  British  Dominions  Year-Book ,  1918. 

180 


LABOUR  AND  CAPITAL  AFTER  THE  WAR  181 


country  were  worth  a  few  paltry  millions.  Since  then 
their  wealth  has  rapidly  increased.  In  a  few  years  it  will 
approach  that  of  the  Motherland,  and  in  a  few  decades 
it  should  vastly  exceed  it.  It  stands  to  reason  that  the 
Dominions  and  Colonies  can  bear,  as  they  would  wish, 
part  of  the  War  Debt.  Besides,  the  undeveloped  re¬ 
sources  of  the  Empire  might  in  part  be  reserved  for  the 
repayment  of  the  War  Debt.  Before  the  War  British 
yearly  budgets  showing  a  national  expenditure  of 
£200,000,000  seemed  monstrous.  After  the  War  a  national 
expenditure  of  £600,000,000  per  year  may  seem  exceedingly 
moderate . 

British  workers  have  become  accustomed  to  a  vastly 
improved  standard  of  living,  to  better  food,  better  furni¬ 
ture,  better  clothes,  more  amusements,  etc.  They  will 
not  care  to  go  back  to  the  low  wages  and  the  conditions 
which  prevailed  before  the  War.  Moreover,  the  men  in 
the  trenches  have  rubbed  shoulders  with  men  from  Canada, 
Australia,  New  Zealand,  South  Africa  and  the  United 
States,  and  have  been  made  acquainted  by  them  with 
labour  conditions  across  the  sea.  As  Canadian,  Aus¬ 
tralian,  New  Zealand  and  South  African  wages  are  also 
approximately  three  times  as  high  as  are  British  wages, 
British  wage-earners  would  migrate  to  the  Dominions 
and  to  the  United  States  in  millions  should  they  not 
obtain  after  the  War  largely  increased  wages  comparable 
with  those  paid  in  the  new  countries.  We  must  accustom 
ourselves  to  the  idea  that  British  wages  will  have  to  be 
Americanised. 

Vast  burdens  will  be  thrown  upon  the  nation,  the 
taxpayers,  and  particularly  upon  the  employers,  the 
capitalists.  Happily,  there  is  reason  for  believing  that 
the  economic  difficulties  caused  by  the  War  will  not 
overwhelm  this  country — that  they  may  prove  a  blessing 
in  disguise.  Men  are  born  idlers.  They  work,  as  a  rule, 

13 


182  LABOUR  AND  CAPITAL  AFTER  THE  WAR 


only  when  compelled.  Civilisation  is  at  its  lowest  in 
the  happiest  climes  where  men  can  live  without  work, 
and  it  is  most  highly  developed  where  a  rigorous  climate  or 
hard  social  conditions  force  men  to  produce  intensively. 
The  most  powerful  promoter  of  civilisation  is  the  tax 
collector.  The  enormous  increase  in  taxation  caused 
by  the  ruinously  expensive  war  against  Imperial  and 
Republican  France  a  century  ago  brought  about  a  tre¬ 
mendous  expansion  of  British  industry.  It  made  this 
country  the  workshop  of  the  world.  The  Civil  War 
of  1861-1865  was  responsible  for  vastly  increased  taxa¬ 
tion  which,  in  turn,  raised  the  American  industries  to 
the  highest  point  of  efficiency.  The  present  War  Debt 
and  very  high  taxation  required  by  it  should  prove  an 
invaluable  stimulus  to  British  capital  and  labour.  The 
War  is  likely  to  treble  permanently  the  national  expen¬ 
diture  and  taxation.  It  is  bound  to  lead  to  a  vast  increase 
in  wages.  I  intend  to  show  that  the  increased  taxes 
and  wages  can  easily  be  found  by  Americanising  British 
production,  and  that  the  War,  far  from  impoverishing 
this  country,  may  ultimately  vastly  enrich  both  Mother¬ 
land  and  Empire. 

Before  the  War  American  wages  were  approximately 
three  times  as  high  as  were  British  wages.  In  1915  the 
United  States  Department  of  Labour  published  a  volume 
of  some  three  hundred  pages  entitled  Union  Scale  of 
Wages  and  Hours  of  Labour ,  May  1st,  1914.  Wage 
figures  are  given  in  it  for  a  number  of  the  more  important 
American  towns.  Perhaps  the  most  interesting  American 
town  with  regard  to  wages  is  Chicago,  because  it  is  the 
most  international.  Being  situated  between  East  and 
West,  the  wages  paid  in  Chicago  are  above  those  paid 
is  some  of  the  Eastern  towns,  such  as  Boston  and  Phila¬ 
delphia,  and  below  some  of  the  Western  towns  such  as 
San  Francisco  and  Los  Angeles.  On  May  1,  1914,  the 


LABOUR  AND  CAPITAL  AFTER  THE  WAR  183 


following  weekly  wages  were  paid  in 

Chicago 

in 

some 

representative  occupations : 

Dols. 

£ 

«. 

d. 

Bakers’  foremen,  day  work  . . 

20 

4 

0 

0 

,,  ,,  night  work 

22 

4 

8 

0 

,,  second-hands,  day  work 

18 

3 

12 

0 

,,  ,,  night  work 

20 

4 

0 

0 

Bakers’  Bohemian  bread,  oven-men,  day  . . 

20 

4 

0 

0 

„  „  night 

22 

4 

8 

0 

,,  ,,  ,,  second-hands,  day 

18 

3 

12 

0 

„  ,,  „  „  night 

20 

4 

0 

0 

Bakers’  Hebrew  bread  foremen 

26 

5 

4 

0 

,,  ,,  ,,  second-hands 

23 

4 

12 

0 

Bakers’  Scandinavian  bread,  foremen,  day 

20 

4 

0 

0 

,,  „  ,,  „  night 

22 

4 

8 

0 

Bakers’  Scandinavian  bread,  second-hands. 

day  ..  ..  ..  ..  •  ■  •• 

18 

3 

12 

0 

Bakers’  Scandinavian  bread,  second-hands. 

night  . . 

20 

4 

0 

0 

Bricklayers 

33 

6 

12 

0 

,  sewer  and  caisson  work 

55 

11 

0 

0 

Carpenters 

28.60 

5 

14 

5 

Cement  workers 

28.60 

5 

14 

5 

Builders’  labourers 

17.60 

3 

10 

5 

Tile-layers 

33 

6 

12 

0 

Coal-carters,  one  horse 

15 

3 

0 

0 

,,  two  horses 

18 

3 

12 

0 

,,  three  horses 

21 

4 

4 

0 

Boiler-makers,  manufacturing  shops 

21.60 

4 

6 

5 

,,  outside 

27.50 

5 

10 

0 

Moulders 

24 

4 

16 

0 

Compositors,  English  . . 

24 

4 

16 

0 

,,  Bohemian 

24 

4 

16 

0 

„  German 

24 

4 

16 

0 

,,  Norwegian 

24 

4 

16 

0 

,,  Polish  . . 

21 

4 

4 

0 

,,  Swedish 

24 

4 

16 

0 

The  wages  given  were  minimum  wages.  The 

hours 

of  labour  were  rather  short.  In  the  baking  trade  in 
Chicago  they  ranged  from  48  to  54  hours  per  week.  In 
the  building  trade  they  were  44  hours  per  week.  The 


1 84  LABOUR  AND  CAPITAL  AFTER  THE  WAR 


carters  worked  66  hours,  the  metal  workers  from  44  to 
54  hours,  the  compositors  48  hours,  etc.  Many  employers 
pay  more  than  the  union  rate  of  wages.  Overtime  on 
weekdays  is  as  a  rule  the  standard  rate  and  a  half,  and 
overtime  on  Sundays  and  holidays  is  paid  usually  at  twice 
the  normal  wage.  A  Chicago  bricklayer  earns  3s.  an 
hour  on  weekdays  and  6s.  an  hour  on  Sundays. 

It  will  be  noticed  that  the  average  wage  of  skilled 
workers  is  about  £5  per  week,  while  the  average  wage 
of  unskilled  labourers  comes  to  from  £3  to  £4  per  week, 
and  that  the  wage  paid  to  German,  Czech,  Norwegian, 
Polish,  Scandinavian  and  Hebrew  workers  is  approxi¬ 
mately  as  high  as  that  paid  to  native  Americans  and  to 
Englishmen.  Officials  and  salary  earners  receive  simi¬ 
larly  high  pay.  Policemen  receive  on  joining  $1,000, 
or  £200  per  year,  and  after  five  years’  service  as  first- 
grade  patrol  men  they  obtain  $1,400,  or  £280,  which  is 
equal  to  £5  8s.  per  week.  The  wages  of  firemen,  postmen, 
servants,  clerks,  office-boys,  shop-girls,  agricultural 
labourers,  etc.,  are  similarly  high. 

British  workers  have  frequently  agitated  for  consider¬ 
ably  increased  wages,  but  their  demands  have  hitherto 
been  opposed  by  their  employers,  who  usually  have 
pleaded  that  a  considerable  increase  in  wages  was  impos¬ 
sible;  that  they  were  working  with  a  narrow  margin  of 
profit;  that  a  considerable  addition  to  the  wages  bill 
would  so  greatly  increase  the  cost  of  production  that  they 
would  have  to  shut  down,  because  they  could  not  sell 
their  productions  at  an  enhanced  price  in  the  world’s 
markets,  and  not  even  in  the  home  market.  There  was 
no  doubt  a  good  amount  of  truth  in  the  arguments  used. 

Although  American  wages,  both  for  skilled  and  un¬ 
skilled  labour,  were  before  the  War  approximately  three 
times  as  high  as  corresponding  British  wages,  American 
commodities  wer^  sold  freely  in  neutral  countries,  and 


LABOUR  AND  CAPITAL  AFTER  THE  WAR  185 


even  in  competition  with  British  productions  made  by 
cheap  labour.  In  many  lines  American  goods  were 
even  far  cheaper  than  similar  British  wares.  By  far  the 
cheapest  motor  cars  obtainable  in  this  country  are  Fords 
and  other  American  machines  which  are  produced  by 
very  highly  paid  labour.  This  fact  suffices  to  show  that 
lowness  of  wages  does  not  necessarily  mean  cheapness 
of  production.  If  the  one  led  to  the  other  it  would 
logically  follow  that  industrial  supremacy  should  not  be 
in  the  hands  of  the  United  States,  but  in  those  of  China 
and  India. 

The  fact  that  the  American  industries  can  successfully 
compete  with  the  British  low- wage  industries  is  not  due 
to.  dumping.  All  who  have  gone  to  the  United  States 
or  who  have  closely  studied  American  economic  affairs 
know  that  America  produces  as  cheaply  as  does  this 
country,  treble  wages  notwithstanding.  American  agri¬ 
cultural  and  industrial  productions  are  sold  at  aibout  the 
same  price  wholesale  as  are  the  equivalent  British  pro¬ 
ductions.  Sometimes  they  are  a  little  dearer  and  some¬ 
times  they  are  cheaper.  People  who  complain  about  the 
high  cost  of  living  in  America  usually  think  of  the  dearness 
of  everything  where  personal  services  are  involved. 
The  fact  that  wholesale  prices  in  England  and  America 
are  about  equally  high  notwithstanding  the  vast  differences 
in  wages  can  best  be  seen  by  comparing  the  prices  of 
certain  standard  commodities  such  as  steel,  or  steel 
rails,  or  plain  cotton  goods,  or  wheat,  or  meat,  in  England 
and  the  United  States  during  a  number  of  years. 

Notwithstanding  treble  wages,  the  American  industries 
as  a  whole  produce  as  cheaply  as  the  British  industries, 
and  sometimes  more  cheaply,  because  the  American 
workers  produce  approximately  three  times  as  much  as 
do  their  British  colleagues.  They  succeed  in  this  because 
the  American  industries  are  on  the  whole  better  organised 


186  LABOUR  AND  CAPITAL  AFTER  THE  WAR 


and  more  scientifically  managed,  and  especially  because 
the  American  workers  have  not  only  better  machines, 
as  is  fairly  generally  known,  but  also  because  the  engine- 
power  per  thousand  workers  is  approximately  three 
times  as  great  as  is  British  engine-power.  These  asser¬ 
tions  seem  incredible,  but  are  true.  If  we  wish  to  com¬ 
pare  British  and  American  output  per  worker  per  year 
we  must  turn  to  the  American  and  British  Censuses  of 
Production.  The  British  Census  of  Production  was 
taken  in  1907  and  an  American  Census  in  1909.  The 
two  years  lie  so  near  together  that  one  may  fairly  compare 
results. 

There  is,  of  course,  a  difficulty  in  comparing  the 
efficiency  of  British  and  American  labour.  In  the  first 
place,  the  industries  in  the  two  countries  have  not  always 
been  officially  classified  in  the  same  manner.  Therefore 
many  industries,  such  as  the  iron  industry,  cannot  be 
compared  by  means  of  the  Census  figures.  In  the  second 
place  the  qualities  of  American  and  British  produce 
frequently  differ  widely.  These  considerations  have 
necessarily  narrowed  the  range  of  comparable  figures. 

The  following  table  contains  statistics  relating  to  some 
British  and  American  industries  which  may  fairly  be 
compared.  They  will  show  conclusively  that  in  many 
of  the  comparable  industries  the  American  workers 
produce  approximately  three  times  as  large  a  quantity 
of  goods  as  do  their  English  colleagues,  and  that  they 
succeed  in  producing  three  times  as  much  not  because 
they  work  three  times  as  hard,  but  because,  as  is  also 
shown  in  the  table,  the  United  States  use  in  the  identical 
industries  approximately  three  times  as  much  horse¬ 
power  per  thousand  men  as  does  Great  Britain.  The 
following  figures  were  published  by  me  in  the  Fortnightly 
Review  for  August,  1913,  and  in  the  Nineteenth  Century 
of  December,  1915.  They  have  been  widely  discussed 
and  criticised  in  the  leading  technical  journals,  such  as 


LABOUR  AND  CAPITAL  AFTER  THE  WAR  187 


Engineering  and  The  Engineer ,  and  by  many  eminent 
industrialists,  but  they  have  hitherto  not  been  success¬ 
fully  challenged : 


Production 
per  Year. 

Number 

of 

Wage- 

Earners. 

Horse- 

Power 

Employed. 

Horse- 

Power 

per 

1,000 

Wage- 

Earners 

Value 
of  Pro¬ 
duction 
per 
Wage- 
Earner 
per 
Year. 

Boots  and  Shoes: 
United  Kingdom  . . 

£ 

20,095,000 

117,565 

20,171 

172 

£ 

171 

United  States 

102,359,000 

198,297 

96,301 

486 

516 

Cardboard  Boxes: 

United  Kingdom  . . 

2,067,000 

19,844 

2,288 

114 

106 

United  States 

10,970,000 

39,514 

•  23,323 

590 

275 

Butter  and  Cheese: 

United  Kingdom  . . 

10,164,000 

7,754 

11,372 

1,477 

1,310 

United  States 

54,911,000 

18,431 

101,379 

5,507 

2,979 

Cement : 

United  Kingdom  . . 

3,621,000 

18,860 

60,079 

3,195 

192 

United  States 

12,641,000 

26,775 

371,799 

13,873 

472 

Clothing : 

United  Kingdom  . . 

62,169,000 

392,094 

17,837 

45 

158 

United  States 

190,566,000 

393,439 

65,019 

165 

484 

Cocoa,  Chocolate  and 
Confectionery : 

United  Kingdom  . . 

16,171,000 

54,629 

19,898 

346 

296 

United  States 

31,437,000 

47,464 

46,463 

980 

662 

Cotton  Goods: 

United  Kingdom  . . 

132,000,000 

559,573 

1,239,212 

2,214 

236 

United  States 

125,678,400 

378,880 

1,296,517 

3,433 

332 

Clocks  and  Watches: 

United  Kingdom  . . 

613,000 

4,448 

550 

125 

137 

United  States 

7,039,400 

23,857 

14,957 

628 

296 

Cutlery  and  Tools: 

United  Kingdom  . . 

2,047,000 

12,485 

•5,248 

420 

164 

United  States 

10,653,200 

32,996 

62,294 

2,069 

323 

Dyeing  and  Finishing 
Textiles : 

United  Kingdom  . . 

18,000,000 

97,588 

190,252 

1,949 

184 

United  States 

16,711,200 

44,046 

107,746 

2,449 

379 

Gasworks : 

United  Kingdom  . . 

20,844,000 

49,413 

33,618 

687 

422 

United  States 

33,362,800 

37,215 

128,350 

3,469 

897 

Firearms  and  Ammu¬ 
nition  : 

United  Kingdom  . . 

677,000 

4,444 

2,619 

595 

152 

United  States 

6,822,400 

14,715 

17,840 

1,214 

464 

188  LABOUR  AND  CAPITAL  AFTER  THE  WAR  ? 


Production 
per  Year. 

Number 

of 

Wage- 

Earners. 

Horse- 

Power 

Employed. 

Horse- 

Power 

per 

1,000 

Wage- 

Earners. 

Value 
of  Pro¬ 
duction 
pei' 
Wage- 
Earner 
per 
Year. 

Gloves : 

United  Kingdom  . . 

£ 

1,056,000 

4,532 

509 

113 

£ 

233 

United  States 

4,726,200 

11,354 

2,889 

256 

416 

Hats  and  Caps: 

United  Kingdom  . . 

5,256,000 

28,420 

5,142 

181 

149 

United  States 

16,598,000 

40,079 

23,524 

588 

414 

Hosiery: 

United  Kingdom  . . 

8,792,000 

47,687 

7,784 

163 

184 

United  States: 

40,028,600 

29,275 

103,709 

804 

309 

Leather  Tanning  and 
Dressing : 

United  Kingdom  . . 

18,289,000 

26,668 

22,609 

847 

686 

United  States 

65,574,800 

62,202 

148,140 

2,389 

1,054 

Lime: 

United  Kingdom  . . 

2,184,000 

15,532 

10,867 

701 

141 

United  States 

3,590,400 

13,897 

27,671 

1,991 

258 

Brewing  and  Malting: 

United  Kingdom  . . 

67,254,000 

68,996 

64,636 

937 

975 

United  States 

82,616,400 

56,339 

347,726 

6,209 

1,466 

Matches : 

United  Kingdom  . . 

862,000 

3,865 

1,591 

408 

223 

United  States 

2,270,600 

3,631 

6,224 

1,729 

625 

Paint,  Colours  and 
Varnish: 

United  Kingdom  . . 

9,127,000 

10,574 

14,575 

1,375 

863 

,  United  States 

24,977,800 

14,240 

56,162 

4,012 

1,754 

Paper : 

United  Kingdom  . . 

13,621,000 

40,955 

172,224 

4,201 

330 

United  States 

53,531,000 

75,978 

1,304,265 

15,846 

705 

Pens  and  Pencils: 

United  Kingdom  . . 

791,000 

6,025 

1,450 

241 

131 

United  States 

2,539,000 

6,058 

4,261 

710 

419 

Printing  and  Publish - 
ing: 

United  Kingdom  . . 

13,548,000 

34,210 

38,611 

1,133 

396 

United  States 

147,757,200 

258,434 

297,763 

1,154 

572 

Railway  Carriages  and 
Waggons: 

United  Kingdom  . . 

9,850,000 

27,105 

30,407 

1,126 

364 

United  States 

24,746,000 

43,086 

97,797 

2,274 

574 

Silk: 

United  Kingdom  . . 

5,345,000 

30,710 

18,867 

608 

142 

United  States 

39,382,400 

99,037 

97,947 

989 

398 

Soap  and  Candles : 

United  Kingdom  . . 

12,707,000 

15,596 

16,938 

1,092 

821 

United  States 

22,897,600 

13,538 

29,159 

2,160 

1,691 

LABOUR  AND  CAPITAL  AFTER  THE  WAR  189 


A  glance  at  the  figures  given  shows  that  in  boots  and 
shoes,  cardboard  boxes,  clothing,  cotton  goods,  clocks 
and  watches,  cutlery  and  tools,  etc.,  American  production 
per  worker  is  approximately  three  times  as  great  as  is 
British  production  per  worker,  and  that  the  startling 
difference  is  accompanied  by  an  almost  identical  difference 
in  the  horse-power  used  per  thousand  wage-earners. 
As  boots  and  shoes,  clothing,  etc.,  are  sold  at  approxi¬ 
mately  the  identical  wholesale  prices  in  England  and  in 
the  United  States,  and  as  the  prices  given  in  the  British 
and  American  Census  are  wholesale  prices,  it  cannot  be 
doubted  that  production  per  man  both  in  value  and  in 
quantity  is  about  three  times  as  great  in  America  as  it 
is  in  this  country.  It  also  follows  that  British  pro¬ 
duction  per  man  can  be  trebled  by  using  American 
processes. 

We  can  best  compare  industrial  production  per  head 
in  England  and  America  by  taking  not  merely  the  gross 
output,  but  also  the  net  output  per  worker  in  the  two 
countries.  Such  a  comparison  can  easily  be  made  with 
the  help  of  the  British  and  American  Censuses  of  Pro¬ 
duction.  Both  Censuses  furnish  the  value  of  the  raw 
materials  used  in  manufacturing  and  state  the  overhead 
expenses  of  each  industry.  By  deducting  the  value  of 
the  raw  materials  used,  rent,  rates,  taxes,  salaries,  etc., 
we  arrive  at  the  actual  value  produced  by  the  workers 
themselves,  and  we  can  thus  ascertain  how  much  every 
British  and  American  worker  produces  net  by  the  work 
of  his  hands  either  per  year  or  per  week.  The  calculation 
indicated  furnishes  the  following  remarkable  result  given 
on  p.  190. 

While  the  lengthy  table  previously  given  shows  the 
high  importance  of  large  individual  production  to  the 
industries  and  to  the  nation  as  a  whole,  the  following 
table  shows  the  importance  of  large  individual  production 


190  LABOUR  AND  CAPITAL  AFTER  THE  WAR 


Net  Produce  per  Worker  per  Week. 


In  the 
United 
Kingdom. 

In  the 
United 
States. 

£ 

s. 

d. 

£ 

8. 

d. 

Boots  and  shoes 

•  • 

1 

7 

4 

3 

10 

0 

Cardboard  boxes 

1 

0 

0 

2 

16 

0 

Butter  and  cheese 

2 

8 

1 

8 

3 

0 

Cement . 

2 

10 

10 

4 

17 

8 

Clothing . 

1 

3 

11 

4 

7 

4 

Cocoa,  chocolate  and  confectionery 

1 

12 

3 

4 

18 

5 

Cotton  goods . 

1 

10 

5 

2 

13 

9 

Clocks  and  watches 

1 

7 

9 

4 

3 

0 

Cutlery  and  tools 

1 

8 

1 

4 

1 

6 

Dyeing  and  finishing  textiles  . . 

1 

18 

11 

4 

4 

3 

Gasworks 

4 

1 

1 

11 

16 

7 

Firearms  and  ammunition 

2 

2 

8 

4 

9 

2 

Gloves . 

1 

11 

2 

3 

10 

9 

Hats  and  caps  . . 

1 

5 

10 

4 

1 

10 

Hosiery . 

1 

3 

5 

2 

2 

8 

Leather  tanning  and  dressing 

2 

5 

0 

4 

13 

1 

Lime  . 

1 

13 

5 

3 

2 

4 

Brewing  and  malting  . . 

6 

7 

3 

19 

10 

5 

Matches  . . 

1 

13 

0 

7 

3 

1 

Paint  and  varnish 

3 

16 

2 

12 

9 

3 

Paper . 

2 

2 

8 

5 

3 

5 

Pens  and  pencils 

1 

9 

8 

4 

5 

9 

Printing  and  publishing 

3 

13 

1 

7 

16 

11 

Railway  carriages,  etc. 

2 

7 

4 

4 

0 

5 

Silk  . 

1 

1 

2 

3 

9 

3 

Soap  and  candles 

2 

19 

8 

11 

7 

8 

to  the  workers  themselves.  It  will  be  noticed  that  the  net 
production  per  worker  per  week  is  about  three  times  as 
great  in  the  United  States  as  in  the  United  Kingdom,  and 
in  some  instances  it  is  much  greater.  Of  the  value 
actually  produced  by  the  worker,  the  larger  part  is  paid 
to  him  in  the  form  of  wages,  while  a  portion  is  retained  in 
the  form  of  profits  by  the  manufacturer.  Now,  it  stands 
to  reason  that  a  worker  cannot  possibly  earn  more  than 
the  whole  value  of  his  work.  If  he  received  the  entire 
value  of  his  output,  the  manufacturer  would  receive 
nothing  for  his  trouble  and  risk  and  give  up  the  business. 
If  the  worker  received  in  wages  more  than  the  value 


LABOUR  AND  CAPITAL  AFTER  THE  WAR  191 


added  to  the  raw  material  by  his  work,  the  factory 
would  soon  be  bankrupt.  In  1907  English  cardboard- 
box  makers  produced  net  £1  per  week.  Hence  they 
could  not  possibly  receive  a  larger  wage  than  £1  per 
week,  whether  the  factory  was  managed  on  ordinary 
capitalist  lines  or  whether  it  was  managed  co-operatively 
or  socialistically.  It  follows  that  the  English  cardboard- 
box  makers  could  increase  their  wages  only  by  increasing 
their  output.  Similarly  the  boot  and  shoe  operatives, 
who  actually  added  only  £1  7s.  4d.  per  week  to  the  value 
of  the  leather  and  other  raw  materials  used,  could  not 
possibly  earn  more  than  the  slender  amount  which  they 
produced  per  week.  Of  course,  the  cardboard-box 
makers,  boot- makers,  etc.,  might  have  struck  for  double 
wages,  and  might  possibly  have  obtained  them.  How¬ 
ever,  as  presumably  all  other  workers  would  have  secured 
a  similar  advance  in  wages,  none  would  have  been  better 
off  in  the  end.  After  all,  the  nation  is  a  great  co-operative 
society.  The  citizens  exchange  their  productions.  Pros¬ 
perity  consists  not  in  high  wages,  but  in  adequacy  of 
houses,  furniture,  food,  clothes,  etc.  Wages  in  themselves 
mean  very  little.  They  are  important  only  for  what 
they  will  buy.  If  the  building  trade,  the  furniture  trade, 
the  clothing  trades  and  agriculture  produce  much  per 
head,  there  will  be  an  abundance  of  house  room,  furniture, 
clothes  and  food,  whether  wages  are  high  or  low.  If, 
on  the  other  hand,  production  per  worker  is  low,  there 
will  be  a  scarcity  of  house  room,  furniture,  clothing  and 
food,  and  the  workers  will  be  ill- clad  and  dissatisfied 
even  if  they  should  earn  each  £10  per  day  in  wages.  It 
follows  that  the  British  workers  have  pursued  a  phantom 
in  endeavouring  to  benefit  themselves  by  increasing 
wages  and  limiting  output.  They  have  hunted  after 
the  shadow  and  neglected  the  substance. 

The  inefficiency  of  the  British  industries  compared  with 
the  American  industries  is  by  no  means  exclusively  due 


192  LABOUR  AND  CAPITAL  AFTER  THE  WAR 


to  the  workers  who  have  endeavoured  to  limit  output, 
but  also  to  the  manufacturers  and  to  the  Government. 
British  employers  have  been  too  conservative.  They 
have  neglected  new  processes  and  inventions.  They 
have  relied  for  success  rather  on  cheap  labour  than  on 
the  utmost  efficiency  in  organisation  and  in  mechanical 
outfit.  These  tendencies  among  masters  and  men  have 
been  encouraged  by  the  attitude  of  the  politicians  who 
have  constantly  told  us  that  England  was  the  richest 
and  the  most  efficient  country  in  the  world,  who  have 
failed  to  take  an  interest  in  economic  matters  because 
they  were  unduly  interested  in  obtaining  votes,  and  have 
encouraged  labour  in  the  suicidal  policy  of  limiting 
output  instead  of  enlightening  the  working  masses. 
Happily,  a  better  spirit  is  abroad.  The  War  has  opened 
the  eyes  of  employers  and  employed  to  the  inefficiency 
of  the  British  industries,  to  the  need  of  progress,  and  to 
the  necessity  of  vastly  increased  production  per  head. 

Inefficient  and  insufficient  production  is  noticeable 
not  only  in  the  British  manufacturing  industries,  but  in 
British  coal- mining  as  well.  This  will  be  seen  from  the 
following  figures,  which  are  taken  from  the  Coal  Tables , 
a  British  official  publication : 

Tons  of  Coal  produced  per  Annum  per  Person  Employed. 


Years. 

United 

Kingdom. 

United 

States. 

tralia. 

New 

Zealand. 

Canada. 

1886-1890  . . 

312 

400 

333 

359 

341 

1891-1895  .  . 

271 

444 

358 

388 

375 

1896-1900  .  . 

298 

494 

426 

441 

457 

1901-1905  . . 

281 

543 

437 

474 

495 

1906-1910  . . 

275 

596 

462 

470 

439 

1908  .. 

271 

538 

500 

478 

422 

1909  .. 

266 

617 

388 

456 

400 

1910  .. 

257 

618 

449 

478 

453 

1911  .. 

260 

613 

485 

487 

395 

1912  .  . 

244* 

660 

542 

503 

472 

*  Strike  Year. 


LABOUR  AND  CAPITAL  AFTER  THE  WAR  193 


This  table  gives  a  very  disquieting  picture.  In  1 886- 1 890 
coal  production  per  man  was  almost  equal  in  the  United 
Kingdom,  the  United  States  and  the  great  Dominions. 
Since  that  time  enormous  improvements  in  the  art  of  coal¬ 
getting  have  taken  place,  and  in  consequence  of  the 
mechanical  and  scientific  progress  made  output  per  man 
in  the  United  States  and  the  Dominions  has  vastly 
increased.  During  that  period  of  continued  progress 
British  coal  production  per  man  has  steadily  and  enor¬ 
mously  declined,  so  that  production  per  man  was  in  1912 
more  than  twice  as  large  in  the  United  States  and  in  the 
great  Dominions  as  it  was  in  this  country.  Of  course, 
in  many  cases  the  United  States  and  the  Dominions 
have  thicker  coal-beds  lying  at  a  lower  depth  than  are 
to  be  found  in  the  United  Kingdom.  Still,  in  view  of 
the  improvements  in  coal-getting,  production  per  head 
should  have  increased  in  the  United  Kingdom  as  well. 
Its  decrease  is  undoubtedly  due  to  the  policy  of  the  coal¬ 
miners  of  increasing  wages  while  restricting  production. 
Coal  is  the  bread  of  industry.  It  is  the  first  raw  material 
in  all  processes  of  manufacture.  Its  cheapness  is  of 
the  greatest  importance  to  all  employers  and  their  workers. 
Owing  to  the  policy  of  restricting  output  and  increasing 
wages,  coal  prices  in  Great  Britain  and  elsewhere  have 
changed  as  given  in  table  on  p.  194  during  the  period 
under  review. 

The  policy  of  the  British  workers  to  make  their  pro¬ 
ductions  scarce  and  dear  has  been  terribly  effective  in  the 
case  of  coal.  During  the  period  under  review,  while 
American,  Australian  and  New  Zealand  coal  has  been 
cheapened  notwithstanding  a  great  increase  in  wages, 
English  coal  doubled  in  price.  At  the  beginning  of  the 
period  England  had  the  cheapest  coal.  That  advantage 
has  been  completely  destroyed.  It  is  noteworthy  that 
American  coal  is  far  cheaper  than  British  coal,  although 


194  LABOUR  AND  CAPITAL  AFTER  THE  WAR 


American  wages  are  far  higher  in  the  coal  industries  than 
are  British  wages.  Obviously,  highly  paid  workers  can 
produce  more  cheaply  than  less  well  paid  workers  if  they 
produce  efficiently. 


Average  Value  of  Coal  per  Ton  at  the  Pit’s  Mouth. 


Year. 

United 

Kingdom. 

United 

States. 

Australia. 

New 

Zealand. 

1886  . . 

s.  d. 

4  10 

s.  d. 

6  4£ 

8  •  d# 

s.  d. 

1887  . . 

4  9f 

6  6£ 

9  2 

10  10 

1888  . . 

5  Of 

6  0 

9  0 

10  11 

1889  . . 

6  4i 

5  3* 

8  11 

11 

3 

1890  .  . 

8  3 

5  2f 

8  6 

11 

0 

1891  . . 

8  0 

5  3} 

8  9 

11 

4 

1892  .. 

7  31 

5  4f 

7  11 

11 

3 

1893  . . 

6  94 

5  4 

7 

5 

11 

1 

1894  . . 

6  8 

5 

1 

6  8 

11 

0 

1895  . . 

6  0£ 

4  9f 

6  4 

11 

1 

1896  . . 

5  101 

4  9f 

6  2 

10  10 

1897  . . 

5  11 

4  n 

5  11 

10  0 

1898  . . 

6  44 

4  5 

5  9 

10  0 

1899  . . 

7 

7 

4  8£ 

6 

1 

10  0 

1900  . . 

10  9f 

5  3f 

6  0 

10  9 

1901  . . 

9  4i 

5  6£ 

7 

7 

11 

0 

1902  . . 

8  2f 

5  8f 

7  9 

10  11 

1903  . . 

7 

8 

6  7 

7  4 

10  9 

1904  . . 

7  2} 

5  lOf 

6  10 

10  9 

1905  . . 

6  Ilf 

5 

8 

6  2 

10  7 

1906  . . 

7  3} 

5  91 

6  3 

10  7 

1907  . . 

9  0 

5  111 

6  10 

10  7 

1908  . . 

8  11 

5  Ilf 

7  41 

10  4f 

1909  . . 

8  Of 

5  71 

7  61 

10  104 

1910  . . 

8  2£ 

5  lOf 

7  61 

11  4 

1911  .. 

8  If 

5  lOf 

7  51 

10  lOf 

1912  .. 

9  Of 

6 

1 

7  61 

10  lOf 

In  transporting  goods  by  railway  and  by  inland  water¬ 
way  and  in  agriculture,  the  United  States  are  as  superior 
to  the  United  Kingdom  as  they  are  in  manufacturing  and 
in  coal- mining.  If  we  compare  British  and  American 
train  loads  and  freights  or  British  and  American  inland 


LABOUR  AND  CAPITAL  AFTER  THE  WAR  195 


water  transport  and  agriculture,  we  find  that,  with  treble 
wages,  carriage  by  land  and  water  is  far  cheaper  in  the 
United  States  than  it  is  in  this  country;  that,  with  treble 
wages,  meat,  bread-corn,  vegetables,  fruit,  etc.,  are 
produced  far  more  cheaply  in  the  Great  Republic  than  in 
these  isles.  It  cannot  be  doubted  that  by  Americanising 
these  industries  American  wages  can  be  paid  to  the  workers 
and  an  American  standard  of  living  be  secured  for  them. 
Moreover,  it  cannot  be  doubted  that  the  trebling  of  pro¬ 
duction  and  of  wages  will  lead  to  the  trebling  of  profits. 

If  we  compare  the  accumulation  of  capital  in  the 
United  States  and  Great  Britain,  we  find  an  infinitely 
more  rapid  progress  in  the  former  country.  The  trebling 
of  wages,  if  accompanied  by  the  trebling  of  production, 
is  feasible  and  it  is  bound  to  lead  to  the  trebling  of  profits. 
Out  of  these  vastly  increased  profits  and  wages  the  in¬ 
creased  taxes  required  by  the  War  Debt  can  easily  be 
found.  That  can  be  shown  by  an  elementary  piece  of 
calculation.  A  man  who  before  the  War  made  a  profit 
of  £1,000  paid,  let  us  say,  £250  in  taxation.  The  trebling 
of  taxation  would  reduce  his  true  income  from  £750  to 
£250 — to  one-third  the  pre-war  figure.  If,  on  the  other 
hand,  by  trebling  his  output  he  should  increase  his  net 
profit  to  £3,000,  trebled  taxation  would  reduce  his  true 
income  to  £2,250.  Notwithstanding  trebled  taxation 
his  true  income  would  have  trebled,  and  out  of  his  trebled 
revenues  he  could  easily  provide  for  the  enlargement  of 
his  works  and  their  improved  mechanical  output. 

I  have  shown  that  American  output  per  man  in  field, 
factory,  workshop,  in  railroading,  etc.,  is  about  three 
times  as  great  as  is  British  output  per  man.  Now,  it 
must  not  be  thought  that  America  has  reached  the  zenith 
of  efficiency.  In  America,  as  elsewhere,  progress  knows 
no  limit.  In  the  United  States,  as  over  here,  there  are 
highly  efficient  works,  moderately  efficient  ones,  and  very 


196  LABOUR  AND  CAPITAL  AFTER  THE  WAR 


inefficient  ones.  By  merely  approaching  the  American 
average  of  efficiency  we  can  treble  production,  wages  and 
the  earnings  of  capital.  By  bringing  production  up  to 
the  higher  level  of  American  efficiency  we  can  quadruple 
-  and  quintuple  output,  wages  and  profits. 

The  bulk  of  the  increased  productions  will  find  the 
readiest  and  the  best  market  in  the  Homeland.  As  the 
nation  is  a  great  co-operative  society,  increased  produc¬ 
tion  and  wages  will  bring  about  vastly  increased  con¬ 
sumption.  The  masses  of  the  people  will  become  better 
housed,  better  furnished,  better  clad,  better  fed,  better 
educated,  and  will  have  more  leisure,  more  cleanliness, 
more  amusements,  etc.  The  British  workers,  like  their 
American  colleagues,  will  dress  like  gentlemen,  smoke 
cigars  and  take  occasionally  lengthy  holidays.  The 
British  workers,  like  their  American  colleagues,  will 
become  house-owners  and  capitalists.  The  old  drudgery 
and  dirt  and  poverty  and  ignorance  of  the  working  classes 
will  disappear. 

The  British  workers  have  received  during  the  War 
some  foretaste  of  Americanised  labour  conditions.  Their 
wages  have  increased  very  greatly,  and  so  has  output  per 
worker.  Before  the  War  the  United  Kingdom  had, 
according  to  the  Census,  about  18,000,000  workers.  Of 
these,  about  6,000,000  have  joined  the  army  and  navy, 
while  about  3,000,000  are  engaged  in  producing  munitions. 
The  remaining  9,000,000  are  employed  upon  ordinary 
peace-work.  Now,  these  9,000,000  on  peace-work  pro¬ 
duce  approximately  as  much  as  did  the  18,000,000  before 
the  War,  for  the  consumption  of  the  people  is  approxi¬ 
mately  identical  with  pre-war  consumption.  The  upper 
and  the  middle  classes  have  no  doubt  restricted  the 
consumption  of  goods  of  every  kind,  partly  owing  to  the 
appeals  for  economy,  partly  owing  to  increased  taxation. 
On  the  other  hand,  the  workers  have  greatly  increased 


LABOUR  AND  CAPITAL  AFTER  THE  WAR  197 


their  purchases.  At  no  time  in  men’s  recollection  have 
the  working  masses  been  better  dressed  and  appeared 
better  fed.  At  no  time  has  there  been  such  a  keen  demand 
for  pianos,  furs,  jewellery,  furniture,  etc.  At  no  time 
have  the  places  of  amusements  been  more  crowded. 
That  experience  will  not  be  lost  upon  the  workers. 

The  best  market  for  vastly  increased  production  will 
be  the  Home  market.  The  second  best  will  be  the 
Empire  and  the  rest  of  the  world  market.  The  Imperial 
market  is  susceptible  of  indefinite  expansion.  In  a  few 
decades  Canada  may  be  as  populated  and  as  wealthy  as 
the  United  States  are  at  the  present  moment.  By  a  wise 
economic  policy,  by  the  development  of  the  Empire,  the 
British  workers  can  secure  vast  prosperity  to  themselves 
and  to  their  country. 

It  need  not  be  thought  that  the  trebling  of  production 
would  mean  the  trebling  of  exertion  on  the  part  of  the 
worker.  It  is  an  old  experience  that  the  greatest  output 
requires  the  least  exertion,  while  the  smallest  output 
calls  for  the  greatest  amount  of  labour.  A  smith,  with  a 
heavy  hammer  worked  by  hand,  produces  little  per  hour 
at  infinite  exertion.  Another  smith,  controlling  a  few 
levers,  can,  with  a  steam-hammer  or  a  hydraulic  hammer, 
produce  a  hundred  times  as  much  without  any  exertion. 
A  man  ploughing  by  hand  with  a  one-share  plough  will, 
with  a  great  expenditure  of  energy,  do  only  a  tithe  of  the 
work  which  can  be  done  by  a  man  sitting  on  a  tractor 
which  pulls  a  ten-share  plough.  The  machine,  far  from 
being  an  enemy  of  labour,  is  labour’s  best  friend.  The 
machine,  far  from  being  the  working-man’s  enemy,  is  his 
best  friend,  for  the  machine  is  to  the  worker  what  the 
horse  is  to  the  carter.  It  is  far  easier  to  direct  a  horse 
than  to  carry  the  weight  which  it  pulls. 

The  efficiency  of  a  carter  is  greatest  when  horse  and  man 
willingly  co-operate.  If  horse  and  man  disagree,  if  the 

14 


198  LABOUR  AND  CAPITAL  AFTER  THE  WAR 


horse  is  ill-treated  and  retaliates  on  the  carter  and  smashes 
up  the  cart,  both  suffer.  It  is  sincerely  to  be  hoped  that 
capital  and  labour,  employers  and  employed,  will  learn 
at  last  that  they  can  benefit  themselves  most  by  mutual 
understanding,  fairness,  generosity,  justice,  co-operation. 
The  policy  of  mutual  exploitation  and  of  mutual  suspicion 
is  an  extremely  short-sighted  one.  Strikes  are  quite 
unnecessary.  It  should  not  pass  the  wit  of  man  to  devise 
an  organisation  whereby  industrial  disputes  might  peace¬ 
fully  be  settled  on  equitable  principles.  Fantastic 
schemes  evolved  by  unpractical  dreamers  will  not  in¬ 
crease  the  prosperity  of  the  workers,  and  will  not  enable 
Great  Britain  to  pay  off  the  debt  created  by  the  War. 
If  we  wish  to  achieve  both  these  aims  we  had  better  rely 
on  experience  and  common  sense  than  upon  poetical 
imagination.  The  Americans  have  solved  the  problem 
of  economic  organisation.  In  the  United  States  capital 
and  labour,  employers  and  employed,  are  immensely 
prosperous. 

The  immediate  necessity  is  not  to  create  a  theoretically 
perfect,  an  ideal,  organisation  of  the  nation,  but  to  pro¬ 
vide  for  the  urgent  needs  of  the  hour.  These  can  obviously 
be  provided,  not  by  reverting  to  the  policy  of  restricting 
output  or  by  pitting  capital  against  labour  and  labour 
against  capital,  but  by  a  harmonious  co-operation  of  the 
two,  by  equitable  distribution  of  profit  and  especially  by 
the  greatest  possible  increase  of  production.  Without 
high  production  there  cannot  be  high  consumption.  The 
most  precious  thing  in  a  nation  is  the  productive  labour 
of  the  people,  and  the  worst  form  of  national  waste  is  the 
waste  of  labour.  By  trebling  output  we  shall  be  able  to 
treble  the  prosperity  and  the  happiness  of  the  workers 
and  of  the  nation  as  a  whole,  and  out  of  a  trebled  national 
income  we  can  easily  pay  the  cost  of  the  War,  however 
large  it  may  be. 


CHAPTER  VIII 


THE  PROBLEM  OF  THE  TARIFF— WOULD  A  TARIFF 

HARM  LANCASHIRE  f* 

By  far  the  most  important  British  manufacturing  industry 
is  the  gigantic  cotton  industry.  During  the  last  few 
years  preceding  the  War  it  has  produced  on  an  average 
about  £120,000,000  worth  of  cotton  goods  per  year,  of 
which  approximately  80  per  cent.,  or  £100,000,000,  were 
exported.  Great  Britain  exports  more  cotton  goods  than 
all  the  countries  of  the  world  combined.  At  first  sight 
Great  Britain’s  supremacy  in  the  cotton  industry  appears 
unchallengeable . 

According  to  the  American  Census  Bulletin  113  there 
were  in  the  world  in  1911  137,792,000  active  cotton 
spindles.  Of  these  the  United  Kingdom  had  54,523,000, 
while  the  United  States  had  only  29,515,000  spindles. 
In  1911  Great  Britain  had  39*46  per  cent,  of  the  spindleage 
of  the  world,  while  the  United  States  had  only  21*1  per 
cent.  The  United  States  exports  of  fully  manufactured 
cotton  goods  come  to  only  £4,000,000  or  £5,000,000  per 
year.  The  spindleage  of  the  British  cotton  industry  is 
almost  twice  as  large  as  that  of  the  American  cotton 
industry,  while  the  British  export  trade  in  cotton  goods 
is  about  twenty  times  as  large  as  the  American  export 
trade.  However,  closer  examination  of  the  cotton 
industry  in  the  two  countries  reveals  the  fact  that  the 

*  From  The  Nineteenth  Century  and  After ,  August,  1912. 

199 


200  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


United  States  cotton  industry  is  far  more  powerful  than 
it  is  generally  believed  to  be  in  Great  Britain. 

Although  the  United  States  have  only  a  little  more  than 
half  as  many  spindles  as  the  United  Kingdom,  they  con¬ 
sume  far  more  raw  cotton  than  does  Great  Britain,  the 
figures  being  as  follows: 

Consumption  of  Raw  Cotton  in  1911. 

Bales. 

United  States  . .  . .  . .  4,705,000 

United  Kingdom  . .  . .  . .  3,782,000 

The  fact  that  the  United  States,  notwithstanding  their 
very  marked  inferiority  in  spindles,  consume  much  more 
cotton  than  the  United  Kingdom  seems  very  strange. 
Englishmen  who  are  insufficiently  acquainted  with  the 
American  cotton  industry  glibly  explain  that  the  Ameri¬ 
cans  with  fewer  spindles  use  more  cotton  than  the  British 
because  the  United  States,  having  an  inferior  cotton 
industry,  make  chiefly  the  coarser  yarns,  while  Great 
Britain,  having  the  cream  of  the  cotton  trade  of  the 
world,  specialises  in  the  finest  yarns  and  tissues,  leaving 
the  coarse  manufacture  to  other  nations.  That  explana¬ 
tion  is  currently  given,  and  it  seems  very  plausible,  but 
unfortunately  it  is  not  quite  correct.  The  American  and 
the  British  cotton  spindles  are  implements  of  different 
character.  Great  Britain  uses  nearly  exclusively  mule 
spindles,  while  the  United  States  rely  almost  entirely  on 
ring  spindles.  Vast  quantities  of  yarn,  identical  to  that 
which  is  made  on  ring  spindles  in  America,  is  made  on 
mule  spindles  in  Great  Britain.  Employed  on  the  same 
yarn,  ring  spindles  consume  50  per  cent,  more  raw  cotton 
and  produce  50  per  cent,  more  yarn  than  do  mule  spindles. 
Ring  spindles  are  labour-saving  spindles.  Consequently 
they  are  preferred  not  only  by  American  cotton  spinners, 
but  by  German  and  Japanese  cotton  spinners  as  well. 


WOULD  A  TARIFF  HARM  LANCASHIRE  ?  201 

It  seems  that  British  conservatism  is  largely  to  blame  for 
the  small  percentage  of  ring  spindles  running  in  Lancashire. 
Ring  spindles  represent  greater  output  and  greater 
mechanical  efficiency.  The  American  cotton  industry 
seems  to  be  more  efficient  than  the  British  cotton  industry, 
not  only  in  the  spinning  department,  but  in  the  weaving 
department  as  well,  as  will  be  shown  later  on. 

Let  us  now  test  the  often -heard  assertion,  “  The  British 
cotton  industry  is  the  largest  in  the  world.”  According 
to  the  number  of  spindles  used,  the  British  cotton  industry 
is  indeed  the  largest  in  the  world.  According  to  the 
quantity  of  cotton  used,  the  United  States  cotton  industry 
is  the  largest  in  the  world.  Should  we,  then,  measure 
the  importance  of  the  cotton  industry  by  the  spindleage 
or  by  the  consumption  of  raw  cotton  ?  The  best  measure 
of  the  importance  of  an  industry  is  evidently  not  the 
quantity  of  machinery  employed,  nor  the  quantity  of 
raw  material  worked  up,  but  the  value  of  its  finished 
productions.  As  regards  Great  Britain  we  have  no  exact 
official  figures  regarding  the  value  of  the  output  of  the 
cotton  industry ,  but  merely  unofficial  estimates  by  experts, 
which  are  fairly  reliable.  According  to  these  the  total 
value  of  the  cotton  goods  produced  in  Great  Britain 
should  in  1909  have  amounted  to  about  £100,000,000  or 
£110,000,000  at  factory.  The  United  States  combine 
with  their  census  of  population  a  census  of  production. 
According  to  the  last  census — that  of  1910 — the  value  of 
the  cotton  goods  produced  by  the  United  States  in  the 
year  1909  was  no  less  than  $628,391,813,  or  £125,678,365. 

There  can  be  no  doubt  that  the  American  cotton 
industry  has  overtaken  the  British  cotton  industry,  not 
only  in  the  quantity  of  raw  material  worked  up,  but  also 
in  the  value  of  cotton  goods  manufactured.  The  outlook 
for  the  Lancashire  industry  is  serious.  In  1880  Great 
Britain  made  considerably  more  steel  than  the  United 


202  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


States.  Now  the  United  States  make  four  times  as  much 
steel  as  Great  Britain.  The  United  States  cotton  industry 
has  been  growing,  and  continues  growing  with  incredible 
rapidity,  while  ours  is  growing  but  slowly.  It  is  to  be 
feared  that  before  long  America’s  supremacy  in  cotton 
manufacturing  may  be  as  great  as  her  present  supremacy 
in  manufacturing  steel,  unless  we  take  suitable  steps  in 
time. 

The  prosperity  of  an  industry  may  be  measured  by 
its  progress  and  expansion.  How  wonderfully  the  United 
States  cotton  industry  has  flourished  and  increased  will 
be  seen  from  the  following  figures  : 


Year . 

Consumption  of 
Raw  Material. 

Value  of  Cotton  Goods^ 
Produced. 

Bales. 

Dots. 

1860  . . 

841,975 

115,681,774 

1870  .. 

1,026,583 

177,489,739 

1880  . . 

1,865,922 

192,090,110 

1890  . . 

2,604,491 

267,981,724 

1900  .. 

3,603,516 

332,806,156 

1910  .. 

4,516,779 

628,391,813 

Since  1860  both  the  consumption  of  cotton  in  the 
United  States  and  the  value  of  the  goods  produced  from 
it  have  grown  more  than  fivefold.  During  the  same 
period  the  value  of  the  cotton  goods  produced  in  Great 
Britain  has  about  doubled,  while  the  consumption  of  raw 
cotton  has  less  than  doubled.  In  the  last  decade,  1900- 
1910,  alone  the  consumption  of  raw  cotton  in  the  United 
States  has  grown  by  almost  a  million  bales,  while  the 
value  of  the  cotton  goods  produced  has  very  nearly 
doubled.  The  progress  of  the  United  States  cotton 
industry  during  the  last  decade  bodes  ill  for  the  cotton 
industry  of  Great  Britain. 


WOULD  A  TARIFF  HARM  LANCASHIRE  ?  203 


The  frequently  heard  taunt  that  the  United  States 
produce  only  the  coarse  cotton  fabrics  which  Lancashire 
does  not  care  to  manufacture  is  quite  unjustified.  The 
American  cotton  industry  works  practically  exclusively 
for  the  home  market.  It  works  for  a  prosperous  nation 
which  demands  goods  of  quality.  The  British  cotton 
industry,  which  exports  four -fifths  of  its  produce,  works 
chiefly  for  foreign  nations.  Now,  two -thirds  of  the 
British  cotton  exports  go,  not  to  the  wealthy  people  in 
Europe,  North  America,  and  Australia,  but  to  the  poverty- 
stricken  nations  of  Asia,  to  India,  China,  and  Asiatic 
Turkey,  to  nations  which  can  afford  to  buy  only  the 
cheapest  and  the  flimsiest  materials.  A  visit  to  the 
United  States  shows  that  the  cotton  goods  generally 
sold  in  that  country  are  certainly  not  inferior  in  quality 
to  those  sold  and  worn  in  Great  Britain.  As  less  than 
2  per  cent,  of  the  cotton  cloth  sold  in  the  United  States  is 
imported  from  abroad,  it  is  clear  that  the  bulk  of  the 
cottons  which  one  sees  in  the  shops  are  of  American 
manufacture,  and  that  the  British  cottons  made  for  the 
British  market  and  the  American  cottons  made  for  the 
American  market  are  approximately  of  equal  quality. 

The  American  cotton  industry  shows  two  remarkable 
tendencies:  the  tendency  to  grow  at  a  truly  astonishing 
pace  and  the  tendency  to  manufacture  the  finest  goods 
to  an  ever  greater  degree.  Between  the  years  1899  and 
1909  the  production  of  cotton  yarn  in  the  United  States 
increased  from  1,467,565,971  pounds  to  2,037,653,722 
pounds,  or  by  39  per  cent.  However,  while  the  produc¬ 
tion  of  coarse  yarn  (No.  20  and  under)  increased  by  only 
19 *2  per  cent.,  that  of  medium  numbers  (Nos.  21  to  40) 
increased  by  60  per  cent.,  and  that  of  fine  yarns  (No.  41 
and  over)  by  no  less  than  103’7  per  cent.  In  1899  the 
coarse  yarn  constituted  58  per  cent,  of  the  total  produc¬ 
tion.  but  in  1909  it  constituted  only  49  per  cent.  On  the 


204  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


other  hand,  the  proportion  of  medium  yarn  increased 
from  37  per  cent,  in  1899  to  42  5  per  cent,  in  1909,  while 
that  of  fine  yarn  increased  from  5*2  per  cent,  to  7*7 
per  cent,  during  the  same  period.  The  progress  in  quality 
has  been  as  remarkable  as  the  progress  in  quantity. 
The  finest  cottons  sold  in  the  United  States,  some  speciali¬ 
ties  excepted,  are,  as  I  have  been  told,  of  American 
make. 

How  greatly  the  growth  of  the  American  industry 
has  benefited  American  labour  will  be  seen  from  the 
following  remarkable  table  which  is  compiled  from  the 
American  censuses : 


Year. 

Number  of  Workers 
in  Cotton  Industry. 

Total  Wages 
per  Year. 

Wages  per 
Worker  per 
Year. 

Dots. 

Dots. 

1860 

122,028 

23,940,108 

196.00 

1870  . . 

135,369 

39,044,132 

288.00 

1880 

174,659 

42,040,510 

240.00 

1890  . . 

218,876 

66,024,638 

301.00 

1900 

297,929 

85,126,310 

285.00 

1910  .. 

378,880 

132,859,145 

350.00 

The  meaning  of  the  foregoing  table  will  be  clear  by 
comparison  with  Great  Britain.  From  the  British  cen¬ 
suses  and  other  Government  publications  I  have  extracted 
the  following  figures: 


Number  of  Workers  in  the  Cotton  Industry. 


In  Great  Britain. 


In  the  United  States. 


1881 

1891 

1901 


487,777 

546,015 

529,131 


1880 

1890 

1900 

1910 


174,659 

218,876 

297,929 

378,880 


Difference 


•  « 


+  41,354 


Difference 


.  +204,221 


WOULD  A  TARIFF  HARM  LANCASHIRE  ?  205 


As  the  figures  relating  to  the  British  cotton  trade  in 
1911  are  not  yet  available,  I  have  given  those  for  1901. 
It  will  be  noticed  that  the  number  of  British  cotton 
workers  increased  by  58,000  during  the  decade  1881-1891, 
and  decreased  by  17,000  during  the  decade  1891-1901. 
Since  1901  the  number  of  British  cotton  workers  may 
have  remained  stationary,  though  probably  it  has  de¬ 
creased.  While  during  the  decade  1891-1901  the  number 
of  British  cotton  workers  decreased  by  17,000,  the  number 
of  American  cotton  workers  increased  by  79,000  during 
the  corresponding  decade  1890-1900.  If  we  assume 
that  the  number  of  British  cotton  workers  has  remained 
stationary  since  1901,  we  come  to  the  extraordinary 
conclusion  that  the  American  cotton  industry,  which, 
measured  by  the  quantity  of  raw  material  used  and  the 
value  of  goods  produced,  has  an  output  approximately 
25  per  cent,  larger  than  that  of  Great  Britain,  produces 
that  larger  and  more  valuable  output  with  150,000 
fewer  workers.  If  we  divide  the  value  of  the  output  by 
the  number  of  men  employed,  it  appears  that  the  output 
of  the  cotton  workers  in  the  two  countries  comes,  in  round 
figures,  to  £200  per  worker  per  year  in  Great  Britain 
and  to  £340  per  worker  per  year  in  the  United  States. 
These  extraordinary  figures  confirm  the  fact  that  the 
cotton  industry  of  the  United  States  possesses  a  far 
greater  efficiency  than  the  cotton  industry  of  Great 
Britain. 

The  very  valuable  Report  on  Cotton  Manufactures 
(Doc.  643,  62nd  Congress,  2nd  Session)  published  by 
the  United  States  Tariff  Board,  an  absolutely  impartial 
American  Government  institution,  contains  a  table 
giving  the  earnings  of  British  and  American  cotton 
workers,  and  these  compare,  in  the  most  important 
grades,  as  follows: 


206  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


United 

Kingdom. 

Northern 

States. 

Southern 

States. 

Weavers,  male  (piecework) 

100.00 

155.5 

132.9 

Weavers,  female  (piecework) 

100.00 

178.6 

142.5 

Mule  spinners,  medium  . . 

100.00 

147.3 

— 

Mule  spinners,  fine 

100.00 

135.0 

— 

Mule  spinners,  very1  fine  . . 

100.00 

145.0 

— 

Ring  spinners,  female  (time) 

100.00 

182.7 

— 

Ring  spinners,  female  (piece) 

100.00 

183.4 

128.8 

Spoolers,  female  (time)  . . 

100.00 

204.8 

170.5 

Spoolers,  female  (piece)  . . 

100.00 

182.3 

131.2 

Fine  and  jack  frame  tenders  (time) 

100.00 

203.0 

— 

Fine  and  jack  frame  tenders  (piece) 

100.00 

179.8 

154.5 

Reel  tenders,  female  (time) 

100.00 

256.9 

— 

Reel  tenders,  female  (piece) 

100.00 

293.3 

1 

The  American  cotton  industry  has  been  a  very  satis¬ 
factory  industry  to  the  workers.  Between  1860  and 
1910  the  number  of  workers  has  more  than  trebled,  and 
the  wage  paid  per  worker  has  practically  doubled.  Be¬ 
sides,  the  proportion  of  men  employed  in  the  American 
cotton  industry  has  been  constantly  increasing,  while 
that  of  the  women  and  children  has  been  consistently 
shrinking.  The  official  record  is  as  follows: 

Tj 

Percentage  of  United  States  Cotton  Workers. 


Year. 

Men  over 
Sixteen  Years. 

Women  over 
Sixteen  Years. 

Children  under 
Sixteen  Years. 

Per  Cent. 

Per  Cent. 

Per  Cent. 

1870 

31-60 

51-45 

16-95 

1880 

35-36 

48-42 

16-22 

1890 

40-58 

48-71 

10-71 

1900 

45-09 

41-52 

13-39 

1910 

50-92 

38-70 

10-38 

In  1910  the  staff  of  the  American  cotton  industry  was 
composed  of  192,930  men,  146,644  women,  and  39,306 


WOULD  A  TARIFF  HARM  LANCASHIRE  ?  207 


children  under  sixteen  years  of  age.  The  British  cotton 
industry  employs  fewer  men  than  the  American  cotton 
industry,  but  it  employs  about  150,000  more  women. 
The  study  of  the  British  decennial  censuses  shows  that 
the  British  cotton  industry  is  becoming  more  and  more 
a  women’s  industry.  This  appears  from  the  following 
figures : 


Percentage  of  Female  Workers  in  the  British  Cotton 

Industry. 


1861 

•  • 

Per 

Cent. 

..  56-7 

1891 

•  • 

•  • 

Per 
Cent. 
..  60-9 

1871 

•  • 

'  ..  59-8 

1901 

•  • 

•  • 

..  62*8 

1881 

•  • 

..  62*0 

While  in  America  the  proportion  of  women  workers 
has  constantly  and  very  rapidly  been  shrinking,  the 
proportion  of  women  workers  in  Great  Britain  has  been 
constantly  and  rapidly  increasing.  Women  should  work, 
not  in  the  factory,  but  in  the  home.  The  fact  that  we 
have  been  gradually  increasing  the  proportion  of  women 
workers  at  the  very  time  when  the  Americans  have  been 
greatly  reducing  it,  and  that  the  proportion  of  women 
workers  is  almost  twice  as  great  in  Great  Britain  as  it  is 
in  America,  is  very  humiliating  to  this  country. 

The  fact  that  the  British  cotton  industry  is  far  less 
efficient  than  the  American  cotton  industry  is  noticeable 
not  only  in  the  spinning  department,  as  has  already  been 
shown,  but  in  the  weaving  department  as  well.  On  this 
point  the  Very  reliable  and  impartial  Report  on  Cotton 
Manufactures,  published  by  the  United  States  Tariff 
Board  in  1912  states: 

English  looms  run  somewhat  faster  than  the  looms  in 
this  country,  but  the  number  of  looms  tended  per  weaver 
is  usually  much  less  than  here.  This  is  in  marked  con¬ 
trast  to  the  woollen  industry,  where  the  number  of  looms 


208  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


tended  is  about  the  same  in  the  two  countries.  In  the 
case  of  plain  looms  (not  automatic)  the  English  weaver 
seldom  tends  more  than  four  looms,  while  in  this  country 
a  weaver  rarely  tends  less  than  six,  and  more  frequently 
eight,  or  even  twelve,  if  equipped  with  “  warpstop 
motions.”  Furthermore,  English  manufacturers  make 
little  use  of  automatic  looms,  of  which  there  were  less 
than  6,000  in  May,  1911,  in  the  whole  of  England,  while 
in  the  United  States  there  are  well  over  200,000.  It  is 
estimated  that  there  are  now  about  10,000  of  these 
looms  in  use  in  England,  and  about  15,000  on  the  Con¬ 
tinent.  Where  automatic  looms  can  be  used,  a  single 
weaver  commonly  tends  twenty  looms,  and  sometimes 
as  many  as  twenty-eight.  The  result  is  that  whereas 
the  output  per  spinner  per  hour  in  England  is  probably 
as  great  as,  or  greater  than,  in  this  country,  the  output 
per  weaver  per  hour  is,  upon  a  large  class  of  plain  goods, 
less,  and  in  the  case  where  automatic  looms  are  used  in 
this  country  and  plain  looms  in  England  it  is  very  much 
less. 

Several  reasons  are  advanced  for  the  delay  in  the  more 
general  adoption  of  the  automatic  loom  in  England. 
For  one  thing,  the  automatic  loom  costs  about  two  and 
a  half  times  the  ordinary  plain  loom,  and  this  has  deterred 
many  English  mills  already  equipped  with  plain  looms 
from  adopting  them.  Again,  English  mills  do  not  run 
such  a  large  number  of  looms  on  a  single-standard  fabric 
as  do  American  mills,  and  the  automatic  loom  has  not 
been  found  so  suitable  as  plain  looms  for  the  varied 
Lancashire  trade  in  dhoties  (loin-cloths)  and  other  fancies. 
Furthermore,  the  automatic  loom  requires  stronger  and 
better  warp  yarn  than  the  plain  loom,  for  the  breakage 
of  a  single  warp  thread  stops  the  loom.  The  American 
mills  use  strong  ringspun  warp  yarns;  while  a  large 
portion  of  the  English  mills,  producing  mainly  for  the 
poorer  classes  of  the  Orient  and  other  regions,  have  to 
size  heavily  to  make  goods  cheap  enough,  and  they 
ordinarily  use  a  much  lower  grade  of  yarn  than  would 
American  mills  for  fabrics  that  pass  under  the  same  trade 
name.  The  warp  yarns  used  in  the  bulk  of  English 
cloths  are  mule  spun;  and  since  they  are  soft  twisted 
to  enable  them  to  take  up  a  larger  amount  of  sizing, 


WOULD  A  TARIFF  HARM  LANCASHIRE  ?  209 


and  to  give  the  required  feel  to  the  cloth,  they  are  not  so 
suited  to  the  automatic  loom  as  are  the  stronger  American 
yarns. 

An  additional  reason  for  the  limited  use  of  the  automatic 
looms  appears  to  be  the  objection  to  them  of  the  labour 
unions,  which  have  been  afraid  that  they  would  be  used 
to  displace  labour  and  to  throw  more  work  on  the  weaver 
without  proportionately  increasing  his  earnings 

When  I  was  in  Boston  I  made  the  acquaintance  of  Mr. 
Eben  Draper,  a  partner  in  the  celebrated  Draper  firm, 
which  manufactures  these  wonderful  automatic  looms. 
When  I  asked  whether  many  of  his  looms  were  sold  in 
Lancashire  he  smiled  and  said  :  “  The  English  are  con¬ 
servative  people.  They  run  only  a  few.  I  believe  the 
masters  find  them  too  dear,  and  the  men  won’t  work 
them.  I  suppose  they  will  begin  buying  our  looms  when 
they  have  lost  their  trade.”  His  opinion  is  confirmed 
by  the  American  Government  authorities. 

I  have  watched  the  performance  of  plain  and  automatic 
looms,  and  it  seems  to  me  perfectly  inconceivable  that 
the  latter  should  be  almost  unknown  in  Lancashire. 

The  cost  of  carriage  of  raw  cotton  from  the  United 
States  to  England  is  so  very  small  that  raw  cotton  is 
practically  no  dearer  in  Lancashire  than  in  the  textile 
districts  of  the  United  States.  On  the  other  hand, 
the  establishment  costs — that  is,  the  costs  of  the  necessary 
buildings,  machinery,  etc. — are  very  much  higher  in 
America  than  in  England.  The  principal  ingredient  in 
the  cost  of  every  article  consists  in  the  wages  paid  in  its 
production.  The  wages  of  the  American  brickmakers, 
bricklayers,  labourers,  founders,  engineers,  etc.,  are 
twice,  and  more  than  twice,  as  high  as  are  British  wages. 
Herein  lies  the  reason  that  the  establishment  expenses 
are  so  much  higher  in  America  than  in  Great  Britain. 
On  this  point  the  Report  already  mentioned  states : 


210  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


The  cost  of  the  building  for  the  spinning  mill  is  $3.27 
per  spindle  in  the  United  States,  as  compared  with  $2.40 
per  spindle  in  England.  The  textile  machinery  for  the 
spinning  mills  amounts  to  $4.84  per  spindle  in  this 
country,  and  $2.80  per  spindle  in  England.  The  total 
cost  of  the  spinning  mill  complete  in  the  United  States 
is  $543,401.04,  against  $396,367.77  in  England,  or  per 
spindle  the  cost  is  $10.83  in  this  country  and  $7.92  in 
England,  the  latter  being  about  73  per  cent,  of  the  total 
cost  in  the  United  States. 

Comparing  the  weaving  mills,  the  cost  of  the  building 
is  shown  to  be  $2. 88  per  spindle  in  the  United  States  and 
$1.58  per  spindle  in  England.  The  textile  machinery 
for  the  weaving  mill  amounts  to  $1.70  per  spindle  in  this 
country  and  $1.16  per  spindle  in  England.  The  total 
cost  of  the  weaving  mill  complete  in  the  United  States 
is  $331,178.00,  as  compared  with  $240,284.70  in  England, 
or,  on  a  spindle  basis,  this  is  $6.60  in  the  United  States 
and  $4.80  in  England,  the  latter  being  about  73  per  cent, 
of  the  total  cost  of  the  weaving  mill  in  the  United  States. 

Referring  to  the  grand  total  cost  of  spinning  and 
weaving  mills,  it  will  be  seen  that  in  the  United  States 
the  cost  is  $17.43  per  spindle,  as  compared  with  $12.72 
per  spindle  in  England,  the  cost  in  England  being  73 
per  cent,  of  the  cost  in  the  United  States. 

If  we  now  compare  the  general  conditions  under  which 
the  British  and  American  cotton  industries  work,  we 
find  that,  while  the  price  of  raw  cotton  is  practically  the 
same  in  the  two  countries,  the  American  manufacturers 
pay  far  more  for  their  buildings,  for  their  machinery, 
and  especially  for  their  labour,  than  do  British  manu¬ 
facturers.  At  first  sight  one  would,  therefore,  think  that 
the  greater  cost  of  buildings,  machinery,  and  labour  in 
America  should  make  American  cotton  goods  far  dearer 
than  British  cotton  goods.  Comparison  of  American 
and  British  shop  prices  seem  to  confirm  this  conclusion. 
Bought  retail,  American  cotton  goods  are,  indeed,  con¬ 
siderably  dearer  than  British  cotton  goods.  However, 


WOULD  A  TARIFF  HARM  LANCASHIRE?  211 


closer  examination  reveals  the  surprising  fact  that, 
notwithstanding  the  far  greater  establishment  and  labour 
costs  involved,  American  cottons  are  no  dearer  if  bought 
wholesale  than  are  British  cottons.  On  this  point  the 
Report  quoted  states: 

The  conclusion  that  under  present  methods  of  produc¬ 
tion  on  many  plain  fabrics  the  cost  of  production  is  not 
greater  in  this  country  is  also  borne  out  by  a  comparison 
of  English  and  American  mill  prices.  A  comparison 
of  such  prices  on  a  large  variety  of  these  fabrics  in  England 
and  the  United  States  for  the  date  July  1,  1911,  shows 
that  in  the  case  of  plain  goods  the  American  price  at  the 
mill  was  in  no  case  much  above  the  English  mill  price, 
while  in  the  majority  of  cases  it  was  lower.  It  should 
be  noted,  however,  that  American  prices  of  this  date, 
relative  to  the  price  of  cotton,  were  somewhat  lower 
than  normal.  The  English  prices  are  the  regular  quota¬ 
tions  for  the  home  market. 

How  is  it  that,  notwithstanding  the  far  greater  establish¬ 
ment  costs  and  the  far  higher  wages  paid  in  America,  the 
American  mill  price  of  cottons  was  found  to  be  “  in  no 
case  much  above  the  English  mill  price,  while  in  the 
majority  of  cases  it  was  lower  ”?  The  American  Govern¬ 
ment  Report  answers  that  question  as  follows: 

In  the  case  of  a  large  variety  of  plain  goods,  the  labour 
cost  of  turning  the  yarn  into  cloth  in  the  United  States  is 
no  greater,  and  in  some  cases  lower,  than  in  England. 
For  cloths  woven  on  automatic  looms  this  is  especially 
the  case;  but  on  certain  classes  of  fabrics  the  same  holds 
true  for  plain  looms,  due  to  the  greater  number  of  looms 
per  weaver  in  this  country.  This  does  not  necessarily 
indicate  any  individual  superiority  on  the  part  of  the 
American  weaver.  It  is  a  matter  of  difference  in  indus¬ 
trial  policy,  and  it  explains  the  difference  in  the  methods 
of  production  which  prevail  at  the  present  time.  Where 
the  automatic  loom  is  now  used  in  England  a  weaver 
frequently  tends  twenty  looms,  as  is  done  in  the  United 
States. 


212  WOULD  A  TARIFF  HARM  LANCASHIRE? 


Finishing  is  a  very  important  process  in  cotton  manu¬ 
facture.  Finishing  includes  the  processes  of  bleaching, 
printing,  dyeing,  mercerising,  etc.  But  finishing  also  is 
no  dearer  in  America  than  in  Great  Britain,  notwith¬ 
standing  the  greater  establishment  expenses  and  higher 
labour  costs.  On  this  point  the  authority  mentioned 
states : 

A  comparison  of  sixty  specific  samples  for  which 
finishing  data  were  obtained  shows  that  in  most  cases  the 
differences  between  the  charges  in  the  two  countries  were 
slight,  but  that  the  American  charge  was  slightly  lower 
on  most  of  the  samples. 

The  explanation  of  the  curious  fact  that  America  pro¬ 
duces  cottons  as  cheaply  as  Great  Britain,  and  in  many 
instances  more  cheaply  than  Great  Britain,  although 
establishment  costs  and  wages  are  far  higher  in  America 
than  Great  Britain,  may  be  summed  up  in  two  words: 
greater  efficiency.  I  think  the  foregoing  official  state¬ 
ments,  which  are  based  on  a  large  number  of  individual 
comparisons,  absolutely  prove  that,  compared  with  the 
American  cotton  industry,  the  British  cotton  industry 
has  stood  still,  and  that  it  can  learn  much  from  the 
United  States. 

The  fact  that  the  American  retail  prices  of  cotton  goods 
are  higher  than  British  retail  prices  is  shown  in  the 
American  Government  Report  to  be  caused  by  the 
different  methods  of  distribution  obtaining  in  the  two 
countries,  and  by  the  differences  in  the  profits  made  by 
middlemen  and  retailers.  English  cottons  are  distri¬ 
buted  over  the  narrow  territory  of  England,  and  are  sold 
by  poorly  paid  clerks  and  assistants.  The  American 
cottons  are  sold  over  an  enormous  territory,  and  therefore 
require  far  heavier  charges  for  freight  and  all  the  other 
expenses  of  distribution.  Besides,  the  American  sales- 


WOULD  A  TARIFF  HARM  LANCASHIRE?  213  . 


men  and  saleswomen  receive  far  higher  wages  than  their 
ill-paid  British  colleagues. 

It  is  generally  believed  in  Lancashire  that  the  British 
cotton  industry  is  the  most  efficient  cotton  industry  in  the 
world,  and  that  it  has  nothing  to  learn  from  other  nations. 
That  belief  is  very  largely  based  on  the  erroneous  idea 
that  practically  all  other  nations  manufacture  cotton 
with  English  machinery.  When  I  talked  to  leading 
Lancashire  men  about  the  greater  efficiency  of  the  Ameri¬ 
can  cotton  industry,  they  told  me  that  the  American 
could  not  be  more  efficient  than  the  English  industry 
because  the  American  cotton  men  employed  chiefly 
British  machinery.  During  my  visit  to  America  I  did 
not  see  any  British  machinery  in  the  American  cotton 
mills  and  factories  which  I  was  allowed  to  inspect,  and  I 
was  told  that  the  proportion  of  English  machinery  used 
was  practically  nil. 

From  the  Report  on  Cotton  Manufactures  by  the  United 
States  Tariff  Board,  it  appears  that  more  than  99-7  per 
cent,  of  the  looms  used  are  of  American  make,  and  only 
0-3  per  cent,  of  foreign  make.  Of  the  ring  spindles, 
99-9  per  cent,  are  of  American  make,  and  0*1  per  cent, 
are  of  foreign  make.  These  two  items,  by  far  the  most 
important,  are  almost  exclusively  furnished  by  American 
makers.  Of  the  roving  or  jack  spindles,  85-8  per  cent, 
are  of  American,  and  14-2  per  cent,  of  foreign  manufac¬ 
ture.  Of  the  cards,  83*7  per  cent,  are  of  American,  and 
16-3  of  foreign  make.  Of  the  mule  spindles,  83T  per  cent, 
are  American  made,  and  16*9  per  cent,  are  imported.  It 
appears,  therefore,  that  the  American  cotton  industry  is 
run  almost  exclusively  by  American  machinery.  Only 
in  the  older  mills  and  factories  are  English  machines  to  be 
found.  American  cotton  manufacturers  with  whom  I 
discussed  the  subject  were  unanimous  in  praising  the 
superiority  of  the  American  machines,  and  I  think 


15 


214  WOULD  A  TARIFF  HARM  LANCASHIRE? 


British  cotton-makers  will  be  wise  in  studying  the  Ameri¬ 
can  machines  and  general  factory  organisation  and 
arrangements. 

Hitherto  Lancashire  has  opposed  Tariff  Reform  with 
the  cry,  “  Tariff  Reform  will  destroy  the  British  cotton 
trade.”  Lancashire  men  have  argued  that  Tariff  Reform 
by  raising  wages  would  raise  the  cost  of  production ;  that 
the  increased  cost  of  production  would  find  its  expression 
in  higher  prices  for  cottons ;  and  that  the  higher  prices  of 
cotton  goods  would  bring  about  the  loss  of  a  large  part  of 
our  great  export  trade.  The  fear  of  the  Lancashire  men 
seems  scarcely  justified  in  the  light  of  the  facts  given  in 
the  foregoing  pages;  for  I  have  shown,  by  means  of 
unimpeachable  expert  evidence,  that  the  price  of  the  out¬ 
put  of  the  American  cotton  industries  is,  as  the  Official 
Report  puts  it,  “  in  the  case  of  plain  goods  in  no  case 
much  above  the  English  mill  price,  while  in  the  majority 
of  cases  it  is  lower.”  I  have  also  shown  by  means  of 
unimpeachable  evidence  that  the  American  cotton 
industry  pays  about  40  per  cent,  more  for  buildings  and 
machinery  and  from  50  per  cent,  to  100  per  cent,  more  for 
wages  than  does  the  British  cotton  industry.  Now,  I 
do  not  think  that  the  most  passionate,  the  most  narrow¬ 
minded,  or  the  most  reckless  defender  of  Free  Trade  is 
prepared  to  assert  that  Tariff  Reform  will  raise  the  cost 
of  buildings  and  machinery  in  Lancashire  by  40  per  cent., 
and  that  it  will  raise  British  cotton  wages  by  from  50  to 
100  per  cent.  But  let  us  assume  for  argument’s  sake  that 
Tariff  Reform  would  have  this  twofold  effect.  Would  it 
then  “  destroy”  the  British  cotton  industry  or,  at  least, 
the  British  export  trade  in  cottons  ?  If  the  American 
cotton  industry  can  produce  cotton  goods  partly  at  about 
the  same  price  as  England,  and  partly  at  lower  prices  than 
England,  although  it  pays  about  40  per  cent,  more  for 


WOULD  A  TARIFF  HARM  LANCASHIRE?  215 


buildings  and  machinery  and  from  50  to  100  per  cent, 
more  for  wages  than  the  English  cotton  industry,  it  is 
perfectly  clear  that  Tariff  Reform  will  not  destroy  the 
British  export  trade  in  cottons  by  raising  the  price  of 
cotton  goods,  even  if  it  should  increase  the  cost  of  our 
buildings  and  machinery  by  40  per  cent,  and  the  wages  of 
our  cotton  operatives  by  from  50  to  100  per  cent.,  pro¬ 
vided  the  British  cotton  industry  was  run  on  American 
lines.  To  put  the  matter  in  other  words,  one  might  say 
that  if  we  made  our  cotton  goods  in  accordance  with 
American  methods  we  could  afford  to  pay  40  per  cent, 
more  for  buildings  and  machinery,  and  from  50  to  100 
per  cent,  more  for  wages,  without  being  compelled  to 
raise  the  prices  of  cotton  goods  to  the  consumer.  How¬ 
ever,  Tariff  Reform  would  not  only  not  destroy  our  cotton 
industry,  but  would  greatly  benefit  it.  The  present  out¬ 
look  for  the  Lancashire  cotton  industry  is  uncertain  and 
distinctly  disquieting.  India  and  China  are  Lancashire’s 
best  customers.  The  Japanese  cotton  industry  consumes 
considerably  more  than  one  million  bales  of  cotton  per 
year,  and  works  with  extremely  cheap  labour.  It  is  very 
rapidly  expanding,  and,  according  to  the  reports  of  our 
Consuls  in  China,  it  is  rapidly  ousting  the  Lancashire 
cotton  industry  from  the  Chinese  market.  The  Japanese 
have  lately  begun  to  encroach  upon  our  Indian  market 
as  well. 

As  very  few  people  are  aware  how  wonderfully  the 
Japanese  cotton  industry  has  progressed,  and  how 
seriously  it  is  threatening  the  British  cotton  industry  in 
neutral  markets,  especially  in  the  markets  of  the  Far  East, 
I  would  give  a  few  figures  which  should  be  of  great 
interest  not  only  to  British  cotton  men,  but  to  all  who 
have  the  prosperity  of  British  manufacturing  industries 
at  heart. 


216  WOULD  A  TARIFF  HARM  LANCASHIRE? 


Japanese  Cotton  Industries. 


Y  ear. 

Imports  of 
Raw  Cotton. 

Exports  of 
Cotton  Yarn. 

Exports  of 
Shirtings. 

Yen. 

Yen. 

Yen. 

1891 

6,998,534 

7,873 

None 

1894 

19,103,923 

955,530 

None 

1897 

43,122,263 

13,490,197 

346,036 

1900 

58,500,002 

20,589,263 

1,754,411 

1903 

68,206,725 

31,418,614 

2,424,253 

1906 

81,293,860 

35,303,526 

7,353,713 

1910 

157,823.603 

45,346,964 

6,541,873 

1913 

231,480,883 

70,997,538 

11,198,348 

Y  ear. 

Exports  of 
Cotton  Drill. 

Exports  of 
Underclothing. 

Exports  of 
Towels. 

Yen. 

Yen. 

Yen. 

1894 

None 

None 

None 

1897 

None 

76,337 

189,773 

1900 

None 

235,056 

356,322 

1903 

215,883 

785,697 

953,363 

1906 

864,837 

2,563,972 

2,174,962 

1910 

5,083,185 

6,011,532 

1,838,117 

1913 

8,847,418 

2,641,576 

A  yen  is  equal  to  2s.  0|d. 


In  1877  the  Japanese  Government  placed  orders  in 
England  for  machinery  sufficient  to  start  several  small 
experimental  cotton  spinning  mills  in  different  parts  of 
the  country.  In  1882  the  first  joint-stock  cotton  spinning 
mill  was  organised  at  Osaka,  with  a  mill  equipment  of 
but  10,500  spindles.  Since  then  the  development  has 
been  rapid.  By  1890  there  were  277,895  spindles  in  the 
country.  In  1900  there  were  1,320,988  spindles;  and  in 
1911,  according  to  the  Statistical  Handbook  of  the  Japa¬ 
nese  Cotton  Spinners’  Association,  there  were  2,099,764 
spindles. 


WOULD  A  TARIFF  HARM  LANCASHIRE  ?  217 


British  cotton  spinners  and  weavers  speak  more  often 
of  the  cotton  industries  of  Austria-Hungary,  Belgium 
and  Switzerland  than  of  those  of  Japan.  Yet  the  Japa¬ 
nese  cotton  industry  alone  consumes  as  much  cotton  as 
these  three  highly  developed  European  countries  com¬ 
bined.  The  United  States  Census  Bulletin  113  supplies 
the  following  figures : 

Consumption  of  Raw  Cotton  in  1911. 

Bales . 

Japan  . .  . .  ...  . .  1,060,000 

Austria-Hungary  . .  . .  . .  749,000 

Belgium  . .  . .  . .  . .  217,000 

Switzerland  . .  . .  . .  . .  100,000 

Twenty  years  ago  the  Japanese  had  practically  no 
cotton  industry,  and  ten  years  ago  they  had  practically 
no  export  trade  in  cotton  manufactures.  Since  then 
Japan  has  become  one  of  the  most  important  cotton¬ 
manufacturing  countries  in  the  world.  She  has  prac¬ 
tically  a  monopoly  of  the  Japanese  home  market,  and 
her  exports  have  increased  in  a  truly  startling  manner, 
as  is  shown  above.  Japan’s  importance  as  an  exporter 
of  cotton  yarns  will  appear  from  the  following  figures, 
which  are  taken  from  the  American  Tariff  Board  Report : 


Exports  of  Cotton  Yarns  in  Order  of  their  Importance 


in  1910. 


United  Kingdom  . . 
British  India 
Japan 
Germany 


Dots. 

. .  64,908,306 

. .  29,130,162 

.  .  22,582,788 

. .  7,873,754 


In  the  exportation  of  cotton  yarn,  Japan,  which  but 
a  few  years  ago  had  no  cotton  industry,  occupies  now  the 
third  place  among  the  nations  of  the  world.  In  1894 
she  exported  955,530  yen  of  cotton  yarn,  and  in  1910  she 
exported  45,346,964  yen  of  cotton  yarn. 


218  WOULD  A  TARIFF  HARM  LANCASHIRE? 


To  which  countries  does  Japan  export  her  cotton  goods  ? 
That  question  is  answered  as  follows  by  the  official 
statistics  of  Japan : 

Japan’s  Exports  of  Cotton  Yarns  to  China. 


1894 . .  . .  . . 

1904 . 

1910 . 

1913..  ..  .. 

Japan’s  Export  of  Cotton 
Towels  to  India. 

Ten. 

1903  ..  ..  18,167 

1910  . .  . .  349,345 

1913  . .  . .  503,090 


Ten. 

876,805 
. .  24,145,213 

. .  40,747,662 

. .  60,095,834 

Japan’s  Exports  of  Cotton 
Underclothing  to  India. 

Jr  en. 

1903  . .  . .  455,758 

1910  . .  . .  4,390,491 

1913  ..  ..  4,734,432 


China  used  to  buy  her  cotton  yarn  from  Great  Britain 
and  India.  Since  1894  Japan’s  yarn  exports  to  China 
have  grown  seventyfold,  and  to-day  Japan  has  in  yarn 
practically  the  monopoly  of  the  Chinese  market.  Mr. 
Alfred  B.  Shepperson,  the  great  American  authority, 
wrote  in  his  book,  Cotton  Facts,  with  which  every  cotton 
manufacturer  is  familiar : 


For  the  lower  kinds  of  yarn  (say  up  to  twenty)  the 
Japanese  mills  practically  control  their  own  and  the 
Chinese  markets  against  the  competition  of  England  and 
India,  and  will  continue  to  do  so.  I  think  Japan’s 
exports  of  cotton  manufactures  will  continue  to  increase. 
Her  mills,  so  far,  have  manufactured  chiefly  the  lower 
grades  of  yarns  and  goods,  but  there  is  no  reason  why 
they  should  not  successfully  compete  with  Europe  in 
the  manufacture  of  better  descriptions. 

As  the  Japanese  mills  are  usually  run  during  twenty 
two  hours  every  day,  and  as  there  are  two  sets  of  opera¬ 
tives  working  eleven  hours  per  day  for  daily  wages  which 
range  from  sixpence  to  a  shilling  for  grown-up  persons. 


WOULD  A  TARIFF  HARM  LANCASHIRE?  219 


Japan’s  competition  in  the  Far  Eastern  markets  is  bound 
to  become  extremely  menacing  to  Great  Britain  as  soon 
as  the  Japanese  cotton  manufacturers  have  succeeded 
in  extending  their  industries  in  accordance  with  their 
wishes.  How  severely  the  British  cotton  industry  is 
already  pressed  by  Japan  in  the  Far  Eastern  markets, 
and  especially  in  China,  Manchuria  and  Korea,  which 
lie  nearest  to  the  shores  of  Japan,  is  apparent  from  the 
Reports  of  the  British  Consuls.  The  Report  from  Korea, 
published  in  1911,  states : 

The  main  feature  revealed  by  a  study  of  the  figures 
is  the  headway  made  in  1910  by  Japanese,  as  compared 
with  British,  goods.  Thus,  the  total  imports  of  coarse 
sheeting  and  grey  shirtings  increased  by  £93,000 — 
entirely  accounted  for  by  Japanese  imports — while 
British  goods  declined  slightly. 

In  the  Consular  Report  for  1910  on  Newchang  we  read: 

My  predecessor  called  attention  in  his  Report  for  1909 
to  the  pressure  of  Japanese  competition,  and  the  returns 
for  1910  bear  eloquent  testimony  to  the  pertinency  of 
his  remarks.  While  Japanese  articles  have  increased 
in  almost  every  line,  those  of  British  and  American 
origin  have  been  imported  in  reduced  quantities  and 
values.  Thus,  we  have  Japanese  grey  shirtings  14,501 
pieces,  in  place  of  9,700  pieces  in  1909  and  1,800  in  1908, 
while  American  shirtings  have  fallen  from  153,331  to 
137,005  pieces,  though  at  an  advanced  price,  and  British 
from  112,370  to  85,850  pieces.  Japanese  sheetings  were 
151,400  pieces  in  1908,  185,585  pieces  in  1909,  and  244,544 
pieces  in  1910  ;  American  sheetings  were  601,541  pieces 
in  1909,  but  only  325,590  pieces  in  1910.  British  sheetings 
were  26,115  pieces  in  1909  and  11,350  pieces  in  1910. 
In  drills  a  similar  phenomenon  is  observable. 

Many  similar  Reports  from  British  Consuls  might  be 
quoted  which  show  that  the  Japanese  cotton  manufac¬ 
turers  are  ousting  the  British  from  the  Chinese  markets. 


220  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


What  is  the  reason  of  Japan’s  success  ?  The  answer 
is  supplied  by  Mr.  H.  H.  Fox,  the  Acting  Commercial 
Attache  to  His  Majesty’s  Legation  at  Pekin.  He  wrote 
in  his  Report  on  China  for  the  year  1910: 

The  two  outstanding  features  in  the  trade  of  cotton 
piece  goods  in  1910  are  the  serious  shrinkage  in  the  imports 
of  British  and  American  plain  fabrics,  largely  due  to  the 
high  prices  prevailing  for  American  cotton  and  the 
increased  import  of  Japanese  cotton  goods,  which  could 
be  laid  down  in  China  at  prices  ranging  from  25  per  cent, 
to  40  per  cent,  less  than  Manchester  goods.  The  decline 
is  most  marked  in  the  case  of  British  shirtings,  which 
decreased  by  some  2,000,000  pieces,  white  sheetings 
2,000,000  pieces,  and  American  sheetings  and  drills 
2,400,000  pieces,  a  total  decline  in  plain  staples  of  6,000,000 
pieces. 

Continuing,  the  Consul  gives  a  table  showing  that 
between  1909  and  1910  the  importation  of  British  cottons 
into  China  decreased  by  4,180,322  pieces,  whilst  the 
importation  of  Japanese  cotton  goods  into  China  has, 
during  the  same  period,  increased  by  993,666  pieces. 
If  the  Japanese  can,  as  the  Commercial  Attache  reports, 
lay  down  their  piece  goods  in  China  “  at  prices  ranging 
from  25  per  cent,  to  40  per  cent,  less  than  Manchester 
goods,”  British  competition  is,  of  course,  quite  useless 
and  futile.  It  is  merely  a  question  of  time  when  Japan 
will  have  the  monopoly  of  the  Chinese  market,  not  only 
in  cotton  yarn,  but  also  in  cotton  cloth. 

So  far,  Japan  has  concentrated  her  efforts  upon  manu¬ 
facturing  for  the  home  market  and  exporting  goods  to 
China,  Korea,  and  Manchuria,  which  are  nearest  to  her 
shores.  Hitherto  she  has  sent  only  a  few  things  to  India, 
but  in  India  also  her  sales  are  increasing  at  an  ominous 
rate,  as  has  been  shown  in  the  foregoing.  In  1903  she 
sent  cotton  towels  to  India  to  the  value  of  18,167  yen. 


WOULD  A  TARIFF  HARM  LANCASHIRE  ?  221 


In  1910  she  had  increased  these  exports  to  349,345  yen. 
Japan’s  exports  of  cotton  underclothing  to  India  have 
increased  from  455,758  yen  in  1903  to  4,390,491  yen  in 
1910.  British  India  is  the  most  important  foreign 
market  of  the  British  cotton  industry.  If  Japan  can 
lay  down  her  cottons  in  China  “  at  prices  ranging  from 
25  per  cent,  to  40  per  cent,  less  than  Manchester  goods,” 
and  thus  make  British  competition  hopeless  and  futile, 
she  can  presumably  also  sell  her  cottons  at  prices  ranging 
from  25  per  cent,  to  40  per  cent,  less  than  Manchester 
goods  in  India.  Under  free  competition  it  is  only  a 
question  of  time  when  Japan  will  have  a  monopoly  of 
the  Indian  market  similar  to  that  which  she  is  creating 
for  herself  in  the  Chinese  markets.  At  present  the 
Japanese  cotton  industry  is  expanding  so  rapidly  that 
it  seems  likely  that  Japan  will  swamp  India  with  her 
cottons  before  long. 

Lancashire  has  lost  the  Japanese  market.  It  will 
probably  lose  the  Chinese  market  within  a  few  years, 
and  it  will  eventually  lose  the  Indian  market  as  well 
unless  the  Indian  market  is  reserved  to  Lancashire  under 
a  system  of  Imperial  preferences.  That  is  its  only  hope. 
Lancashire  can  compensate  itself  for  the  probable  loss 
of  the  Chinese  market  by  preferential  arrangements 
for  her  cottons  not  only  with  India,  but  with  all  the  other 
British  Dominions  and  Colonies,  which,  with  their  rapidly 
growing  population,  are  bound  to  be  ever  more  valuable 
customers. 

Tariff  Reform  would  benefit  Lancashire  not  only  in 
the  foreign  markets,  but  also,  and  most  particularly, 
in  the  British  home  market.  It  is  obvious  that  Tariff 
Reform,  by  raising  British  wages,  will  greatly  increase 
the  purchasing  power  of  the  British  population,  and  with 
it  the  demand  for  cotton  goods.  The  enormous  and 
scarcely  suspected  possibilities  of  the  British  home 


222  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


market  as  a  consumer  of  cotton  goods  can  most  clearly 
be  expressed  in  two  lines  as  follows : 

£ 

Home  trade  in  cottons  in  United  States  in  1909  . .  120,000,000 

Home  trade  in  cottons  in  United  Kingdom  in  1909  . .  20,000,000 

The  United  States,  with  a  population  exactly  twice  as 
large  as  that  of  the  United  Kingdom,  consumed  in  1909 
exactly  six  times  as  large  a  quantity  of  cotton  goods  as 
the  United  Kingdom.  In  other  words,  the  average 
American  family  bought  in  1909  three  times  as  many 
shirts,  sheets,  handkerchiefs,  etc.,  as  the  average  British 
family.  The  figures  £20,000,000  for  Great  Britain  and 
£120,000,000  for  the  United  States  are  practically  manu¬ 
facturers’  cost  prices.  As  the  charges  and  profits  of  the 
middleman  are  far  larger  in  America  than  in  Great  Britain, 
it  follows  that  the  American  public  expends,  not  six  times, 
but  from  eight  to  ten  times  as  much  money  on  cotton 
goods  as  does  the  British  public.  We  may  therefore 
safely  say  that  the  average  American  family  buys  every 
year  three  times  as  large  a  quantity  of  cotton  goods, 
and  spends  every  year  from  four  to  five  times  as  much 
money  on  cotton  goods  of  every  kind,  as  the  average 
family  in  Great  Britain. 

Our  cotton  industry  suffers  from  the  narrowness  and 
insufficiency  of  the  British  home  markets.  It  suffers 
from  the  poverty  of  our  working  population,  which  has 
to  stint  itself  of  cotton  goods.  What  prevents  the  average 
British  family  spending  as  much  on  cotton  sheets,  shirts, 
etc.,  as  is  spent  by  the  average  American  family  ?  Chiefly 
the  insufficiency  of  British  wages,  which  all  Tariff 
Reformers  wish  to  raise,  and  which,  no  doubt,  they  will 
be  able  to  raise  considerably  under  Tariff  Reform.  Uni¬ 
versal  experience  has  shown  that  the  introduction  of  a 
tariff  has  that  effect  upon  the  wages  of  labour.  If  our 
people  were  as  prosperous  as  the  American  people,  our 


WOULD  A  TARIFF  HARM  LANCASHIRE  ?  223 


cotton  industry  should  theoretically  be  able  to  sell  every 
year  in  the  British  home  market  from  four  to  five  times 
as  large  a  quantity  of  cotton  goods  as  it  does  at  present. 
It  should  sell,  in  the  United  Kingdom  alone,  cotton 
goods  to  the  value  of  from  £80,000,000  to  £100,000,000. 
It  is,  of  course,  doubtful  whether  our  workers  will  become 
as  prosperous  as  the  American  workers.  Besides,  if  they 
should  become  as  prosperous,  they  might  not  be  as 
lavish  in  their  expenditure  on  cotton  goods.  They 
might  prefer  some  more  exhilarating  form  of  spending 
their  money.  However,  it  seems  perfectly  fair  to  assume 
that  under  improved  industrial  conditions,  which  Tariff 
Reform  and  intensified  production  all  round  will  no  doubt 
bring  about,  every  British  family  should  spend  half 
as  much  money  as  the  average  American  family.  That 
is,  surely,  a  conservative  estimate.  In  that  case  we 
should  have  a  sale  of  cotton  goods  in  the  home  market 
of  about  £50,000,000  per  year.  If  British  wages  were 
better,  the  home  market  should  easily  be  able  to  absorb 
an  additional  £30,000,000  worth  of  British  cottons.  This, 
therefore,  is  another  reason  why  Lancashire  should  support 
Tariff  Reform. 

Apart  from  this  more  remote  benefit,  Tariff  Reform 
would  bring  an  immediate  benefit  to  the  British  cotton 
industry  in  the  home  market.  Very  few  people  are  aware 
that  Great  Britain  is  an  enormous  importer  of  foreign 
cotton  goods,  which  enter  this  country  in  constantly 
growing  quantities,  as  the  following  figures  show : 


Imports  of  Cotton  Manufactures  into  Great  Britain. 


£ 

1895  . .  . .  4,303,840 

1900  ..  ..  5,194,351 

1905  >.  8,108,474 


£ 

1910  . .  . .  9,823,551 

1911  ..  ..  10,379,151 

1913  .  .  .  .  12,250,000 


The  cotton  goods  imported  into  Great  Britain  during 
1911  were  classified  as  follows: 


224  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


£ 

Piece  goods,  printed,  dyed,  or  coloured  2,581,076 


Others  ..  ..  ..  ..  ..  187,100 

Gloves  . .  . .  . .  . .  . .  590,688 

Hosiery  . .  . .  . .  . .  . .  2,085,318 

Lace  . .  . .  .  .  .  .  . .  2,539,402 

Ribbons  and  trimmings  .  .  . .  . .  1,176,577 

Unenumerated  . .  . .  . .  . .  1,218,990 


Total .  10,379,151 

It  will  be  noticed  that  the  cotton  goods  imported  into 
Great  Britain  in  1911  were  not  coarse  yarns  and  piece 
goods,  but  belonged  almost  exclusively  to  the  highest 
class.  They  were  goods  which  were  made  valuable  owing 
to  the  large  amount  of  labour  contained  in  them.  It  is 
probably  an  understatement  to  say  that  of  the  £10,379,151 
of  cotton  goods  imported  into  Great  Britain  in  1911, 
£7,000,000  represented  wages  of  labour  and  profits  of 
manufacturers  and  middlemen.  The  bulk  of  these 
£7,000,000  could  be  secured  to  British  manufacturers, 
middlemen  and  wage-earners  by  Tariff  Reform.  Com¬ 
parison  will  show  how  enormous  is  the  amount  of  cotton 
goods  imported  into  this  country.  Cotton  piece  goods 
constitute  75  per  cent,  of  our  cotton  exports.  Of  these 
we  sent  the  following  to  those  European  countries  enu¬ 
merated  in  the  monthly  accounts  of  trade  and  navigation 
and  the  United  States : 


British  Exports  of 

Cotton  Piece 

Goods  in  1911 

To  France . . 

•  *  •  • 

£ 

423,662 

To  Germany 

•  •  •  • 

. .  2,094,425 

To  the  Netherlands 

•  •  •  • 

988,514 

To  Belgium 

•  •  •  • 

769,900 

To  Switzerland  . . 

•  •  •  • 

.  .  1,594,236 

To  Italy  . . 

•  •  •  • 

341,100 

To  Portugal,  Azores  and  Madeira 

487,420 

To  Greece  . . 

•  •  •  • 

376,926 

To  Roumania 

•  »  •  • 

608,262 

To  Denmark 

•  • ,  •  • 

403,334 

To  United  States 

•  •  •  • 

..  1,858,716 

Total 

•  •  •  • 

. .  9,946,495 

WOULD  A  TARIFF  HARM  LANCASHIRE  ?  225 


In  1911,  therefore,  the  foreign  cotton  goods  which  we 
imported  were  of  greater  value  than  the  piece  goods 
which  we  exported  to  all  the  countries  enumerated  in 
the  foregoing  table. 

To  our  cotton  industry  the  Chinese  market  is  second 
in  importance  only  to  the  Indian  market,  which  is  by  far 
our  largest  outlet.  In  1911  we  sent  to  China,  inclusive 
of  Hongkong,  cotton  goods  of  all  kinds  to  the  value  of 
£10,018,219.  The  foregoing  figures  show  that  by  a  tariff 
we  can  secure  to  our  cotton  industry  within  our  frontiers 
a  market  about  as  large  as  that  afforded  for  cotton  piece 
goods  by  all  Europe  and  the  United  States  combined, 
and  considerably  larger  than  the  Chinese  market.  We 
can  have  it  for  the  asking.  It  can  be  secured  by  Lan¬ 
cashire  by  a  stroke  of  the  pen.  These  figures  show 
incidentally  that  we  need  not  fear  retaliation,  because 
we  can  capture  in  the  home  market  cotton  trade  of  far 
greater  value  than  that  which  we  can  possibly  lose  by 
retaliation.  Besides,  experience  teaches  us  that  a  care¬ 
fully  drafted  tariff,  supported  by  a  wise  diplomacy, 
does  not  lead  to  retaliation  or  to  a  Customs  war. 

I  think  the  Lancashire  cotton  industry  has  not  under¬ 
stood  its  best  interests  in  opposing  Tariff  Reform.  It 
has  opposed  it  through  lack  of  knowledge.  It  has  op¬ 
posed  it  because  it  honestly  believed  that  a  tariff  would 
have  a  fatal  effect  upon  its  productions,  and  especially 
upon  its  export  trade.  It  has  opposed  it  because  it  has 
not  sufficiently  studied  its  great  rival,  the  American 
cotton  industry,  and  the  effect  which  the  high  Protective 
tariff  has  had  upon  that  industry.  That  effect  was 
described  as  follows  by  the  United  States  Tariff  Board 
in  its  Report : 

On  account  of  the  different  mill  methods  in  this  country, 
the  domestic  labour  cost  of  weaving  on  a  large  variety 
of  plain  fabrics  of  wide  consumption  is  below  the  foreign 


226  WOULD  A  TARIFF  HARM  LANCASHIRE  ? 


cost.  Except  in  the  case  of  a  few  special  fabrics,  and  in 
the  case  of  various  manufactured  articles,  some  of  which 
are  produced  in  this  country  to  a  very  slight  extent, 
the  American  industry  practically  supplies  the  whole  con¬ 
sumption.  The  imports  of  yarn  in  1910  were  less  than 
one-half  of  1  per  cent,  of  the  home  production  in  pounds. 
The  imports  of  cotton  cloth  were  less  than  2  per  cent, 
of  the  home  production  in  value. 

Mill  prices  are  in  many  cases  as  low  in  this  country  as 
in  the  world's  markets.  Where  higher,  as  in  the  case  of 
the  finer  classes  of  products,  they  are  rarely  higher  by 
anything  like  the  whole  amount  of  the  duty.  The  effect 
of  the  present  tariff,  then,  in  most  cases  is  not  so  much  to 
add  the  duty  to  the  domestic  manufacturer' s  price  as  to 
secure  him  the  American  market;  and,  in  the  case  of  most 
articles  of  widest  consumption,  to  prevent  the  compe¬ 
tition  of  the  foreign  manufacturer,  either  in  normal  or 
abnormal  times.  On  account  of  more  costly  methods 
of  distribution  in  this  country  from  producer  to  consumer, 
the  latter  pays  a  decidedly  higher  retail  price  than  the 
European  consumer,  even  in  the  case  of  fabrics  on  which 
the  cost  of  production  and  the  mill  price  are  as  low  here 
as  there. 

How  would  the  simultaneous  introduction  of  Tariff 
Reform  and  of  American  manufacturing  methods  affect 
the  cotton  workers  ? 

It  may,  of  course,  be  argued  that  if  we  introduced 
American  labour-saving  machinery  we  should  displace 
150,000  cotton  workers,  and  that,  for  that  reason  alone, 
we  ought  not  to  change  our  manufacturing  methods. 
That  argument  seems  to  me  illogical.  Experience  teaches 
us  two  lessons:  Firstly,  that  the  introduction  of  labour- 
saving  machinery  increases  the  demand  for  manufactured 
articles  so  greatly  as  not  to  reduce,  but  to  increase  the 
number  of  workers;  secondly,  that  a  deliberate  retention 
of  antiquated  methods  and  labour-wasting  machinery 
inevitably  brings  about  the  ruin  of  industries  and  of  the 
workers  engaged  in  them.  Lastly,  it  is  not  my  impression 


WOULD  A  TARIFF  HARM  LANCASHIRE?  227 


that  the  American  cotton  workers  work  harder  than  the 
English.  Their  great  output  is  solely  due  to  better 
machinery  and  organisation.  By  clinging  to  its  present 
methods  and  to  Free  Trade,  Lancashire  will  not  even 
succeed  in  maintaining  its  present  position.  It  will, 
instead,  hand  over  its  trade  in  neutral  markets  partly 
to  the  more  perfectly  equipped  cotton  industries  of  the 
United  States,  and  partly  to  the  cheap  labour  industries 
of  Japan  and  China,  to  the  great  harm  of  Lancashire  and 
its  workers. 

It  is  frequently  asserted  that  Tariff  Reform  would 
ruin  our  cotton  industry.  I  think  I  have  shown  that 
Tariff  Reform  should  greatly  benefit  it.  It  would  raise 
wages  substantially,  increase  our  market  for  cotton  goods 
at  home,  and  preserve  for  us  the  markets  of  India  and  the 
Dominions  and  Colonies.  It  should  rather  lower  than 
increase  our  cost  of  production,  and  therefore  promote 
our  cotton  exports  to  foreign  countries.  Of  the  industries 
of  this  country  the  cotton  trade  should  be  one  of  the 
greatest  beneficiaries. 


CHAPTER  IX 


THE  PROBLEM  OF  THE  TARIFF— THE  BRITISH  AND 
THE  AMERICAN  MERCHANT  MARINE* 

Frequently  when  men,  both  in  England  and  elsewhere, 
discuss  the  merits  of  Free  Trade  and  Protection,  one 
hears  assertions  such  as  “  Free  Trade  has  given  England 
her  supremacy  on  the  sea,”  or  “  Protection  has  destroyed 
the  American  shipping  trade.”  Post  hoc  sed  non  propter 
hoc.  It  is  a  mere  coincidence  that  the  British  Merchant 
Marine  did  greatly  increase  and  that  the  American 
Merchant  Marine  did  rapidly  decline  about  the  time  when 
England  abandoned  Protection  for  Free  Trade. 

Few  people  in  Great  Britain  are  aware  how  incredibly 
quickly  American  shipping  has  declined.  Its  downward 
course  during  the  last  sixty  years  will  be  seen  at  a  glance 
from  the  following  table : 


Total  Exports  and  Imports  of  the  United  States  by  Sea. 
( From  the  Report  of  the  Commissioner  of  Navigation.) 


Year. 

In  American 
Vessels. 

In  Foreign 
Vessels. 

Total. 

Percentage 
carried  in 
American 
Vessels. 

Dots. 

Dots. 

Dots. 

Per  Cent. 

1850 

239,272,084 

90,764,954 

330,037,038 

75-2 

1860 

507,247,757 

255,040,793 

762,288,550 

65-5  i 

1870 

352,969,401 

638,927,488 

991,896,889 

35-6  ] 

1880 

258,346,577 

1,224,265,434 

1,482,612,011 

17-4 

1890 

202,451,086 

1,371,116,744 

1,573,567,830 

12-9 

1900 

195,084,192 

1,894,444,424 

2,089,528,616 

9-3 

1910 

260,837,147 

2,721,962,475 

2,982,799,622 

8-7 

1913 

381,032,496 

3,392,028,429 

3,773,060,925 

10*1 

*  From  The  Nineteenth  Century  and  After,  October,  1912. 

228 


THE  FUTURE  OF  THE  SHIPPING  TRADE  229 


In  1850  more  than  seven-tenths  of  the  American 
foreign  trade  was  carried  in  American  vessels.  In  1913 
only  one-tenth  of  the  American  trade  was  carried  in  such 
vessels. 

In  the  United  States  and  elsewhere  it  is  frequently 
asserted  that  the  Civil  War  “  destroyed  ”  the  American 
Merchant  Marine.  That  assertion  is  not  correct.  The 
American  shipping  engaged  in  the  foreign  trade  was 
diminished  not  only  by  the  attacks  of  hostile  cruisers, 
but  still  more  by  being  transferred  from  the  foreign  to 
the  coasting  trade;  for,  in  the  absence  of  adequate  rail¬ 
ways,  the  coasting  trade  had  received  an  enormous 
impetus  through  the  war  which  made  huge  transports 
of  food  and  war  materials  necessary.  The  rapidity  with 
which  the  American  ships  were  so  transferred  will  be  seen 
from  the  following  figures : 


Tonnage  of  American  Vessels. 


Year. 

In  the 

Foreign  Trade. 

In  the 

Coasting  Trade. 

* 

• 

Tons. 

Tons. 

1861 . 

2,496,894 

2,704,544 

1862  . .  . .  •  . . 

2,173,537 

2,616,716 

1863  . 

1,926,886 

2,960,633 

1864  . 

1,486,749 

3,245,265 

1865  . 

1,518,350 

3,381,522 

Difference 

-  978,544 

+  676,978 

In  the  course  of  the  war  the  tonnage  of  American  vessels 
engaged  in  the  foreign  trade  diminished  by  almost 
1,000,000  tons,  while  that  engaged  in  the  coasting  trade 
increased  by  almost  700,000  tons.  The  actual  war  losses 
suffered  by  the  American  Merchant  Marine  through 
capture  and  through  the  placing  of  American  shipping 

1G 


230  THE  FUTURE  OF  THE  SHIPPING  TRADE 

under  foreign  flags  were  not  as  great  as  is  generally 
believed. 

Since  the  time  of  the  war  the  character  of  the  American 
Merchant  Marine  has  curiously  changed.  The  shipping 
engaged  in  the  foreign  trade  has  slowly  and  almost 
continuously  diminished,  whilst  that  engaged  in  the 
coasting  trade  has  almost  continuously  and  very  greatly 
increased,  as  follows : 


Tonnage  of  American  Vessels. 


Year. 

In  the 

Foreign  Trade. 

In  the 

Coasting  Trade. 

Tons. 

Tons. 

1865  .. 

1,518,350 

3,381,522 

1870  . . 

1,448,846 

2,638,247 

1875  . . 

1,515,598 

3,219,698 

1880  .. 

1,314,402 

2,637,686 

1885  . . 

1,262,814 

2,895,371 

1890  . . 

928,062 

3,409,435 

1895  . . 

822,347 

3,728,714 

1900  . . 

816,795 

4,286,516 

1905  . . 

943,750 

5,441,688 

1910  . . 

782,517 

6,668,966 

1913  . . 

1,019,165 

6,817,013 

Difference 

•  • 

-499,185 

+  3,436,491 

During  the  decade  1900-1910  alone  the  American 
coastal  shipping  has  increased  by  considerably  more  than 
2,000,000  tons,  a  truly  wonderful  progress. 

Many  causes  have  contributed  to  the  decline  of  the 
American  Merchant  Marine.  Of  these  the  Civil  War  is 
only  one.  Another  cause  lay  in  the  evolution  of  the  ship 
towards  the  middle  of  last  century.  During  the  sailing- 
ship  era  the  United  States  had,  as  far  as  the  shipping 
industries  are  concerned,  an  enormous  natural  advantage 
over  the  nations  of  Europe,  and  especially  over  thinly 


THE  FUTURE  OF  THE  SHIPPING  TRADE  231 


wooded  Great  Britain,  through  the  abundance  of  timber 
and  of  the  other  important  raw  materials  required  in 
shipbuilding,  which  were  plentiful  and  extremely  cheap 
in  America,  and  which  were  very  scarce  and  very  dear  m 
Europe.  That  advantage  was  lost  with  the  advent  of  the 
iron  ship. 

Many  people  in  the  United  States  and  in  Great  Britain 
believe  that  the  decline  of  the  maritime  industries  of  the 
United  States  has  been  caused  by  the  policy  of  Protection. 
However,  according  to  the  best  American  authorities, 
the  former  prosperity  of  the  United  States  shipping  was 
due,  not  to  Free  Trade,  but  to  rigorous  Protection,  and 
the  decline  of  the  United  States  shipping  was  due,  not  to 
Protection,  but  to  the  withdrawal  of  Protection — to  Free 
Trade.  On  that  point  the  very  important  Report  of  the 
American  Merchant  Marine  Commission,  which  examined 
all  the  leading  shipping  people  in  the  United  States, 
contains  the  following  weighty  pronouncement : 

The  American  merchant  fleet  from  1800  to  1860  was  the 
second  in  size  and  the  most  enterprising,  efficient  and 
profitable  in  existence.  But  throughout  most  of  that 
time  it  was  a  protected  industry — protected  at  first  by 
discriminating  duties  and  tonnage  taxes,  which  were  not 
completely  removed  against  our  most  formidable  rival 
until  1849;  protected  later  by  the  California  gold  discovery 
and  the  Crimean  War.  When  these  factors  lost  their 
power,  as  they  did  in  1855-1856,  there  came  the  sharpest 
and  most  significant  decline  that  American  shipbuilding 
has  ever  suffered,  in  the  half-decade  from  1855  to  1860. 

How  powerful  the  American  shipbuilding  industry  was 
even  during  the  very  period  of  1855-1860,  when,  as  we 
are  authoritatively  informed,  it  suffered  “  the  sharpest 
and  most  significant  decline  that  it  has  ever  suffered,” 
will  be  seen  from  the  fact  that  the  output  of  shipping  of 
the  United  States  was  then  equal  to  the  tonnage  built  in 
Great  Britain,  while  the  tonnage  which  the  United  States 


232  THE  FUTURE  OF  THE  SHIPPING  TRADE 


built  for  foreign  countries  was  far  greater  than  the  tonnage 
which  Great  Britain  built  for  foreign  countries.  On  this 
interesting  and  important  point  Mr.  E.  T.  Chamberlain, 
the  Commissioner  of  the  Bureau  of  Navigation,  furnished 
the  following  figures  to  the  American  Merchant  Marine 
Commission : 

Tonnage  Built  during  the  Four  Years  1858-1861. 

In  the  United  States.  In  Great  Britain. 

849,307  tons.  883,495  tons. 

Tonnage  Sold  to  Foreign  Countries  during  the  Four 

Years  1858-1861. 

In  the  United  States.  In  Great  Britain. 

101,222  tons.  74,642  tons. 

Shortly  before  the  outbreak  of  the  American  Civil  War, 
and  during  a  period  when  the  American  shipbuilding 
industry  suffered  “  the  sharpest  and  most  significant 
decline  that  it  has  ever  suffered,”  that  industry  was 
certainly  as  powerful  as  that  of  Great  Britain,  although 
the  latter  had  Free  Trade. 

In  1871  the  United  States  began  the  policy  of  admitting 
free  of  duty  materials  for  shipbuilding,  and  gradually 
extended  that  policy.  The  Dingley  Tariff  of  1897,  for 
instance,  stated: 

Section  XII. — That  all  materials  of  foreign  production 
which  may  be  necessary  for  the  construction  of  vessels 
built  in  the  United  States  for  foreign  account  and  owner¬ 
ship,  or  for  the  purpose  of  being  employed  in  the  foreign 
trade,  including  the  trades  between  the  Atlantic  and 
Pacific  ports  of  the  United  States,  and  also  the  materials 
necessary  for  the  building  of  their  machinery,  and  all 
articles  necessary  for  their  outfit  and  equipment,  may  be 
imported  in  bond  under  such  regulations  as  the  Secretary 
of  the  Treasury  may  prescribe ,  and  upon  proof  that  such 
materials  have  been  used  for  such  purposes,  no  duty  shall 
be  paid  thereon.  But  vessels  receiving  the  benefit  of  this 


THE  FUTURE  OF  THE  SHIPPING  TRADE  233 


section  shall  not  be  allowed  to  engage  in  the  coastwise 
trade  of  the  United  States  more  than  two  months  in  any 
one  year,  except  upon  the  payment  to  the  United  States 
of  the  duties  of  which  a  rebate  is  herein  allowed ;  provided 
that  vessels  built  in  the  United  States  for  foreign  account 
and  ownership  shall  not  be  allowed  to  engage  in  the 
coastwise  trade  of  the  United  States. 

Section  XIII. — That  all  articles  of  foreign  production 
needed  for  the  repair  of  American  vessels  engaged  in 
foreign  trade,  including  the  trade  between  the  Atlantic 
and  Pacific  ports  of  the  United  States,  may  be  withdrawn 
from  bonded  warehouses  free  of  duty  under  such  regula¬ 
tions  as  the  Secretary  of  the  Treasury  may  prescribe. 

Under  this  law,  not  only  steel  plates  and  shapes,  but 
articles  of  equipment  as  elaborate  and  costly  as  ships’ 
compasses,  were  imported  free  of  duty  for  the  use  of 
vessels  built  in  the  United  States  for  the  foreign  trade,  and 
for  the  coastwise  trade  between  the  Atlantic  and  the 
Pacific.  As  freight  is  cheap,  and  as  all  nations  habitually 
sell  their  wares  cheaper  in  the  foreign  than  in  the  home 
market,  the  United  States  could  obtain  their  raw 
materials  required  for  shipbuilding  as  cheaply  as  the 
shipbuilders  of  the  United  Kingdom.  It  is  therefore 
clear  that  Protection  has  not  caused  the  decline  of  the 
United  States  shipbuilding  industry,  which  has  continued 
since  1897  notwithstanding  the  abrogation  of  all  duties 
on  imported  materials  for  shipbuilding.  On  this  point 
Mr.  E.  T.  Chamberlain  wrote  in  his  Official  Report  on 
Navigation  of  1909:  “  Among  the  fanciful  causes  for  the 
decline  of  the  American  Merchant  Marine  the  high  tariff 
is  sometimes  included.  Senator  Gallinger  wrote  in  his 
Report  “  Development  of  the  American  Ocean  Mail 
Service  and  American  Commerce  ”  (60th  Congress, 

1st  Session,  doc.  225):  i 

Any  shipowner  or  builder  who  desires  to  send  to 
Scotland  for  his  steel  plates  and  shapes  and  other  materials, 


234  THE  FUTURE  OF  THE  SHIPPING  TRADE 


not  only  for  the  construction,  but  for  the  equipment  and 
repair  of  the  vessel  for  the  deep-sea  trade  or  for  the  coast¬ 
wise  trade  between  our  Atlantic  and  Pacific  ports,  could 
have  brought  in  such  materials  by  the  shipload,  and 
received  a  rebate  of  every  penny  of  the  duty.  If  our 
ocean  fleet  has  not  increased,  it  has  not  been  for  lack  of 
free  access  to  the  free  materials  of  the  world;  it  has  not 
been  because  of  the  “  extortion  ”  of  any  trust  or  the 
“  barriers  ”  of  a  protective  tariff.  The  truth  is  that  “  free 
materials  ”  alone,  as  has  so  often  been  demonstrated,  are 
not  a  determining  factor  in  the  prosperity  of  any  industry. 

The  American  protective  system  reaches  no  farther 
than  the  land  frontiers,  for  the  sea  is  open  to  all.  Free 
Trade  prevails  on  the  sea.  The  decline  of  the  shipbuilding 
and  shipping  industries  of  the  United  States  is  due — and 
this  fact  is  most  important — neither  to  the  Civil  War  nor 
to  Protection,  but  to  the  absence  of  Protection  for  Ameri¬ 
can  shipping  on  the  seas. 

Protection  has  brought  many  of  the  manufacturing 
industries  from  Europe  to  the  United  States,  and  has 
made  them  exceedingly  prosperous  and  powerful.  Owing 
to  the  rapid  and  continuous  expansion  of  the  manufac¬ 
turing  industries,  employment  in  America  is  excellent  as 
a  rule,  and  there  is  work  for  all  who  will  work.  Besides, 
the  high  import  duties  which  were  imposed  for  the 
purpose  of  protecting  “  the  American  standard  of  living  ” 
have  maintained  American  wages  at  a  level  which  is 
approximately  twice  as  high  as  that  of  British  wages. 
The  cost  of  ships  consists  of  two  factors,  the  price  of  raw 
materials  and  the  wages  paid  in  shipbuilding.  Now, 
although  the  American  shipbuilders  can  buy  their  beams, 
plates,  etc.,  as  cheaply  as  the  British  shipbuilders,  either 
in  the  United  States  or  abroad — for  they  can  import  them 
free  of  duty — American  ships  cost  before  the  War  far 
more  than  British  ships,  because  of  the  great  difference 
between  American  and  British  wages.  On  this  point 


THE  FUTURE  OF  THE  SHIPPING  TRADE  235 


Mr.  John  M‘Neil,  late  National  President  of  the  Brother¬ 
hood  of  Boilermakers  and  Shipbuilders  of  America,  stated 
before  the  Committee  on  Merchant  Marine  and  Fisheries 
of  1906: 

I  have  served  my  time  in  Scotland,  and  have  worked  at 
the  business  there  considerably.  ...  In  Scotland  and 
England  the  present  rate  of  wages  is  6s.  a  day.  That  is 
the  standard  rate  of  wages.  You,  gentlemen,  know  what 
that  is.  It  is  $1.50.  That  is  the  price  paid  at  the  present 
time  at  the  Portsmouth  Navy  Yard,  England.  To-day, 
in  this  country,  our  mechanics  in  the  Navy  Yard  here 
average  $3.20  per  day,  or  more  than  100  per  cent,  more 
than  is  paid  in  that  country.  The  same  condi- 7‘ons  will 
govern  in  the  private  yard'*  of  private  corporations.  All 
the  shipbuilding  done  in  the  Old  Country,  and  a  lot  of  it 
done  here,  is  done  on  piecework.  Tha4  includes  all 
shipbuilders,  skilled  mechanics,  riveters,  fitters,  caulkers, 
boilermakers.  The  large  majority  of  the  work  is  done  on 
piecework.  In  Scotland  the  highest  rate  of  wages  at  the 
present  time  for  piecework  in  driving  rivets  is  9s.  per 
hundred  for  three-quarter  rivets,  and  10s.  6d.  for  larger 
rivets.  The  price  increases  with  the  size  of  the  rivets. 
In  this  country  you  are  paying  $3.50  per  hundred,  whereas 
they  are  paying  $1.75.  ..  . 

The  rate  of  wages  and  conditions  existing  on  the  other 
side  make  it  impossible  for  us  people  here  to  compete 
successfully  with  them  in  the  market.  The  wages  over 
there  are  low,  exceedingly  low;  they  are  over  100  per  cent, 
lower  over  there  than  here  in  a  great  many  cases.  ...  I 
hope  not  a  gentlemen  here  would  desire  to  see  American 
labour  put  on  the  same  level  or  in  the  same  condition  as 
in  England.  There  is  no  accommodation  for  the  working¬ 
man  there.  He  is  a  working-man  as  long  as  he  lives ;  but 
in  this  country  it  is  different,  and  we  want  you,  gentlemen, 
to  keep  it  different,  too.  We  do  not  want  conditions  like 
that  to  come  into  this  country,  and  I  hope  no  gentleman 
here  will  try  to  enact  any  legislation  that  will  bring  about 
conditions  whereby  we  will  be  compelled  to  work  for  the 
same  rate  of  wages  or  under  the  same  conditions  as  they 
do  in  England. 


236  THE  FUTURE  OF  THE  SHIPPING  TRADE 


In  the  words  of  the  American  Merchant  Marine  Com¬ 
mission:  “The  real  dominant  factor  is  not  the  price  of 
materials,  but  the  high  wages  of  the  skilled  American 
workmen  who  fashion  the  plates  and  beams  into  the 
finished  ship.” 

As  wages  in  the  shipbuilding  trade  were  on  an  average 
about  twice  as  high  in  the  United  Slates  as  in  Great 
Britain,  American  ships  were  far  more  expensive  than 
British  ships.  Now,  the  first  cost  of  a  ship  is  a  matter  of 
the  greatest  importance  to  shipowners.  One  must  reckon 
5  per  cent,  on  the  first  cost  of  the  ship  for  interest,  5  per 
cent,  for  depreciation,  and  6  per  cent,  for  insurance,  or  in 
all  a  charge  of  16  per  cent,  per  year.  If,  owing  to  the 
great  difference  in  wages,  an  American  ship  costs  50  per 
cent,  more  to  build  than  a  British  ship  of  equal  size — that 
is  an  average  difference — the  American  shipowner  who 
competes  with  British  trade  is  handicapped  at  the  outset 
with  a  crippling  charge  of  8  per  cent,  per  annum  owing  to 
the  greater  first  cost  of  his  ships  alone.  But  in  running 
his  ships  in  free  competition  with  the  nations  of  the  world 
the  American  shipowner  had  to  reckon  not  only  with  this 
handicap  of  8  per  cent,  per  year,  for  American  seamen’s 
wages  also  were  in  many  cases  twice  as  high  as  are  British 
seamen’s  wages.  The  American  Merchant  Marine  Com¬ 
mission  gave,  for  instance,  the  following  example: 


Total  Wages  Paid  per  Annum. 


American  s.s.  “  Acapulco ,” 
operating  between  San  Francisco 
and  Panama. 

Gross  tonnage,  2,572  tons. 

66  men. 

Wages,  $36,720.00  per  annum. 


British  s.s.  “  Palena,”  operating 
between  San  Francisco  and 
Valparaiso. 

Gross  tonnage,  2,553  tons. 

86  men. 

Wages,  $18,430.32  per  annum 


The  American  ship  Acapulco  paid  twice  the  wages  paid 
by  the  British  ship  Palena,  although  the  British  ship 
carried  twenty  more  men. 


THE  FUTURE  OF  THE  SHIPPING  TRADE  237 


Before  the  War  American  ships  had  not  only  to  pay  far 
higher  wages  than  British  ships,  but  they  had  also  to 
provide  better  food  and  accommodation.  For  instance, 
according  to  Par.  107  of  the  American  Navigation  Laws 
American  seamen  are  entitled  to  no  less  than  1 J  pounds 
of  fresh  meat  per  day  when  in  port,  and  to  1  \  pounds  of 
salt  meat,  canned  meat,  and  fish  per  day  when  not  in 
port.  Owing  to  the  abundance  of  employment  and  the 
high  rate  of  wages  prevailing  universally  in  America, 
cheap  sailors  were  unobtainable  in  that  country.  Hence, 
free  competition  between  English  and  American  ships 
was  out  of  the  question.  The  inability  of  the  United 
States  to  compete  freely  on  the  sea  with  Great  Britain  on 
neutral  routes  is  most  strikingly  shown  by  the  following 
figures : 

Tonnage  of  Shipping  passed  through  the  Suez  Canal 

DURING  1911. 

Vessels.  Tons  Net. 

United  Kingdom  ..  ..  3,089  11,715,947 

United  States  . .  . .  2  1,690 

In  the  trade  through  the  Suez  Canal  English  and 
American  shipping  stood  in  1911  in  the  relation  of  6,000 
to  1 .  On  the  neutral  sea  routes  American  shipping 
disappeared.  Had  the  United  States  not  reserved  the 
coasting  trade  to  American  shipping,  and  subsidised  a 
few  liners,  there  would  have  been  no  American  Merchant 
Marine  at  all. 

The  Americans  are  an  intensely  patriotic  people,  and 
they  think  it  is  a  disgrace  to  their  country  that  their 
Merchant  Marine,  which  used  to  rival  that  of  Great 
Britain,  has  been  practically  wiped  out;  that  almost  her 
entire  foreign  trade  was  before  the  W ar  carried  in  foreign 
bottoms,  that  the  freight  charges  made  by  foreign  ships 
for  American  exports  were  as  a  rule  higher  than  the  freight 


238  THE  FUTURE  OF  THE  SHIPPING  TRADE 


charged  by  the  same  ships  for  Europea  exports ;  that  an 
American  wishing  to  travel  from  New  York  to  Rio 
Janeiro  or  Buenos  Ayres  in  comfort  had  to  cross  the 
ocean  twice,  travelling  via  England;  that  in  case  of  war 
their  fleet  was  dependent  for  its  coal  on  foreign  colliers. 
They  felt  all  this  as  a  national  humiliation.  Hence  the 
citizens,  regardless  of  class  and  occupation,  called  passion¬ 
ately  for  the  re-creation  of  the  American  Merchant 
Marine.  Important  organisations  for  the  promotion  of 
the  American  Merchant  Marine  sprang  up  throughout  the 
United  States.  Countless  meetings  of  merchants,  manu¬ 
facturers,  bankers  and  other  business  men  demanded  its 
re-creation  for  purely  patriotic  reasons.  On  January  26, 
1910,  the  National  Board  of  Trade  resolved  at  its  fortieth 
annual  meeting  at  Washington: 

That  in  our  judgment  the  commercial  interests  of  the 
country  require  prompt  legislation,  such  as  will  result  in 
the  re-establishment  of  the  American  Merchant  Marine. 

That  we  ask  of  Congress  not  only  the  immediate 
establishment  of  American  owned  and  managed  mail  and 
freight  lines  to  our  dependencies  and  the  leading  com¬ 
mercial  countries  of  the  world,  but  also  a  proper  legisla¬ 
tion  which  will  enable  our  citizens  to  build,  operate  and 
maintain  steamers  and  sailing-vessels  on  an  equal  footing 
with  any  other  maritime  Power. 

I  could  quote  hundreds  of  similar  resolutions  passed 
unanimously,  not  only  by  associations  of  business  men, 
but  by  farmers’  granges  as  well. 

That  the  re-creation  of  the  American  Merchant  Marine 
is  not  a  sectional  or  party  matter,  but  a  national  question, 
will  be  seen  by  the  examination  of  the  party  platforms 
and  the  party  literature  of  the  two  great  American  parties. 
I  have  before  me  the  Republican  and  Democratic  Cam¬ 
paign  Books  of  1908  and  1910.  In  the  Republican 
Campaign  Book  the  re-creation  of  the  Merchant  Marine 


THE  FUTURE  OF  THE  SHIPPING  TRADE  239 


is  advocated  on  eleven  closely  printed  pages.  In  the 
Democratic  Campaign  Book  it  is  demanded  on  no  less 
than  thirty-one  pages.  The  two  great  American  parties 
are  agreed  as  to  the  end,  but  they  are  not  agreed  as  to 
the  means.  The  Republican  party  has  hitherto  recom¬ 
mended  subsidies  sufficient  to  enable  American  ship¬ 
owners  to  compete  with  other  nations  on  the  ocean. 
The  Democratic  party  has  proposed  a  discriminating 
tariff  in  favour  of  goods  imported  in  American  ships  by 
means  of  rebates  on  the  import  duties  charged  on  the  goods 
so  imported.  Ship-Subsidy  Bills  of  various  kinds  have 
come  every  year  before  the  American  Congress. 

The  Atlantic  trade  of  the  United  States  was  before  the 
War  carried  on  chiefly  by  Great  Britain  and  Germany, 
whilst  the  Pacific  trade  of  the  United  States  was  largely 
in  the  hands  of  the  Japanese.  The  American  shipping 
trade  had  fallen  into  the  hands  of  Great  Britain,  Germany 
and  Japan  because  wages  in  these  three  countries  were 
far  lower  than  in  the  United  States.  Now  every  good 
American  is  indignant  that  they  should  have  lost  their 
Merchant  Marine  through  the  free  competition  of  “  low- 
priced  alien  labour,”  and  not  unnaturally  they  wish  to 
take  from  Great  Britain  and  the  other  great  maritime 
countries  the  trade  which  they  have  lost.  How  can  this 
be  done  in  view  of  the  existing  commercial  treaties  ? 
The  late  Senator  Elkins,  in  a  speech  delivered  in  the 
United  States  Senate  on  April  5,  1897,  on  discriminating 
duties,  said: 

When  the  United  States  wish  to  restore  shipping  and 
become  independent  on  sea  as  on  land,  a  treaty  with 
England,  covered  with  the  dust  of  nearly  a  century,  is 
brought  forth,  and  we  are  solemnly  told  its  sacred  pro¬ 
visions  must  not  be  violated,  and  we  must  remain  bound 
hand  and  foot,  powerless  to  help  ourselves,  though  what 
is  proposed  is  right  and  proper,  and  would  benefit  our 


240  THE  FUTURE  OF  THE  SHIPPING  TRADE 


interests.  No  treaty  should  stand  in  the  way  of  our 
having  what  belongs  to  us  as  a  matter  of  right,  and  having 
our  fair  share  of  the  carrying  trade  of  the  world.  Of 
course,  no  treaty  should  be  violated  as  long  as  it  is  in 
force,  but  this  Bill  expressly  proposes  in  terms  to  abrogate 
all  treaties  in  conflict  with  the  provisions  of  the  Bill. 

If  that  policy,  which  is  frequently  advocated,  should 
be  adopted,  the  danger  of  retaliation  would,  of  course, 
arise.  How  will  that  danger  be  met  ?  In  a  Report  of 
1910  (61st  Congress,  2nd  Session,  Report  502,  Part  2) 
on  the  American  Merchant  Marine,  we  read : 

All  the  commercial  nations  of  the  world  need  what  we 
have  to  sell.  They  cannot  afford  to  impose  unnecessary 
burdens  upon  their  own  people  in  their  efforts  to  punish  us 
for  the  exercise  of  the  very  right  which  they  claim  for 
themselves.  In  one  respect  at  least  we  have  the  advan¬ 
tage  of  any  other  country.  We  produce  the  cotton 
which  keeps  their  factories  running,  gives  employment 
to  their  labour  and  clothes  their  millions.  They  cannot 
get  it  elsewhere,  and  there  is  no  substitute.  It  is  incon¬ 
ceivable  that  England,  or  Germany,  or  any  other  country 
which  manufactures  cotton  cloth  would  put  a  burden  upon 
our  raw  material,  without  which  their  machinery  would 
stop  and  their  people  would  suffer. 

The  United  States  very  naturally  desire  to  recover 
the  shipping  trade  they  have  lost  from  those  countries 
to  which  they  have  lost  it.  Owing  to  Great  Britain’s 
predominance  on  the  seas,  the  American  maritime  policy 
is  necessarily  and  inevitably  anti-British,  sympathy  with 
Great  Britain  notwithstanding.  Besides,  the  War  has 
given  to  the  United  States  both  an  extremely  powerful 
shipbuilding  industry  and  an  enormous  and  rapidly 
growing  Merchant  Marine,  which  before  long  may,  for 
all  we  know,  exceed  the  British  Merchant  Marine  in 
tonnage.  It  stands  to  reason  that  the  Americans  will 
strive  to  preserve  the  prosperity  of  these  two  great 


THE  FUTURE  OF  THE  SHIPPING  TRADE  241 


industries  after  the  conclusion  of  Peace.  Great  Britain 
must  therefore  reckon  with  the  fact  that  the  United  States 
will  become  an  exceedingly  powerful  competitor  on  the 
sea;  that  England  may  lose  her  old  paramountcy  in 
shipbuilding  and  shipping. 

America’s  future  as  a  shipbuilding  country  is  particu¬ 
larly  promising,  because  the  United  States  are  likely  to 
apply  to  shipbuilding  the  same  methods  of  high  specialisa¬ 
tion  and  of  intensive  production  which  have  proved  so 
extraordinarily  successful  in  all  their  manufacturing 
industries.  America  will  build  ships  of  a  standardised 
pattern  in  large  numbers  with  the  help  of  the  most  power¬ 
ful  machinery,  and  she  will  be  well  assisted  by  her  workers, 
whose  exceedingly  high  individual  output  will  counter¬ 
balance,  or  perhaps  more  than  counterbalance,  the  effect 
of  higher  American  wages.  Besides,  she  has  a  very  great 
advantage  in  the  possession  of  the  most  powerful  iron 
industry  in  the  world,  and  of  an  abundance  of  cheap 
coal.  Exactly  as  in  the  old  sailing-ship  era,  the  United 
States  may  have  a  considerable  advantage  over  Great 
Britain  in  consequence  of  the  possession  of  a  superabun¬ 
dance  of  relatively  cheap  raw  materials  which  are  used 
in  shipbuilding.  Last,  but  not  least,  the  difference 
between  British  and  American  wages  which  previously 
existed  and  which  was  very  great,  should  after  the  War 
be  much  smaller  than  it  has  been  in  the  past.  Possibly 
British  and  American  wages  will  in  future  be  approxi¬ 
mately  equal.  It  follows  that  England  can  preserve  a 
great  shipbuilding  industry  only  by  Americanising  her 
shipbuilding  methods,  by  producing  ships  on  the  largest 
and  most  scientific  scale,  and  by  insisting  that  labour 
will  cease  obstructing  progress  and  restricting  output. 
Otherwise  she  will  not  be  able  to  compete  in  shipbuilding 
with  the  United  States. 

The  wages  of  British  and  of  other  non-American 


242  THE  FUTURE  OF  THE  SHIPPING  TRADE 


sailors  also  may,  in  the  future,  approximate  the  wages 
paid  to  sailors  in  the  United  States.  It  follows  that 
Great  Britain  will  have  to  look  to  her  laurels  not  only  as 
a  shipbuilding  country,  but  also  as  a  shipping  nation. 

The  War  will  undoubtedly  cause  the  rise  of  a  great 
shipbuilding  and  shipping  industry  in  the  United  States. 
England  must  reckon  with  the  fact  that  she  is  going  to 
receive  in  the  United  States  a  great  and  possibly  a  redoubt¬ 
able  competitor  on  the  sea.  However,  there  is,  of  course, 
the  possibility  that  America  will  establish  her  maritime 
greatness  rather  at  the  cost  of  Germany  than  at  that  of 
the  United  Kingdom  and  of  the  British  Empire.  After 
all,  the  greatness  of  a  nation’s  shipbuilding  industry  and 
shipping  trade  should  depend  on  the  importance  of  its 
general  industry  and  on  the  extent  of  its  foreign  trade. 
If  production  should  continue  increasing  relatively 
slowly  in  Great  Britain  and  the  British  Empire,  and 
should  continue  rapidly  expanding  in  the  United  States, 
it  would  be  only  natural  that  the  United  States  would  in 
course  of  time  dominate  the  world,  not  only  in  general 
industrial  production,  but  in  shipbuilding  and  shipping 
as  well.  After  all,  inefficiency  of  production  and  supre¬ 
macy  in  the  shipping  trade  are  not  reconcilable. 

The  territory,  the  population  and  the  natural  resources 
of  the  British  Empire  are  vastly  greater  than  those  of 
the  United  States.  If  the  Imperial  resources  should  be 
adequately  exploited,  the  British  people  will  become  the 
foremost  nation  in  the  world  in  industry,  wealth  and 
power;  and  if  it  should  temporarily  lose  its  maritime 
supremacy  to  the  United  States  owing  to  the  War,  it 
would  ultimately  regain  it,  because  industrial  supremacy 
and  maritime  supremacy  are  bound  to  go  hand  in  hand. 


CHAPTER  X 


THE  ECONOMIC  POSITION  AND  FUTURE  OF  FRANCE* 

It  is  of  the  greatest  importance  to  the  Allies  that  the 
Great  War  should  lead  to  a  complete  and  decisive  victory, 
but  it  is  equally  important  for  them  and  for  the  world 
at  large  that  at  the  end  of  the  struggle  a  rejuvenated,  a 
more  powerful  and  a  greater  France  should  arise.  I 
shall  endeavour  to  show  in  the  following  pages,  by  means 
of  the  best  and  the  most  reliable  information  available, 
that  the  peace  of  the  world  and  the  future  of  human 
civilisation  are  bound  up  with,  and  are  dependent  upon, 
France’s  future  greatness,  and  upon  her  increased  power 
and  prosperity. 

The  Germans  have  been  a  conquering  nation,  a  nation 
of  valiant  and  aggressive  warriors,  since  the  earliest 
ages,  since  the  very  beginning  of  their  recorded  history. 
German  hordes,  the  Cimbri  and  Teutones,  invaded  the 
Roman  Empire  in  the  second  century  before  Christ, 
in  the  time  of  Marius,  and  made  Rome  tremble.  The 
Germans  were  defeated  for  a  time,  but  later  on,  when 
Rome  declined,  they  were  bought  off.  At  the  end  of 
the  fourth  century  and  the  beginning  of  the  fifth  century 
after  Christ  the  German  Goths  and  Vandals  ravaged  the 
Eastern  European  provinces  of  the  Roman  Empire, 
plundering  Athens,  Corinth  and  many  other  towns. 
Theyg  overran  Asia  Minor,  destroying  Ephesus  and  other 
celebrated  centres  of  civilisation.  They  swept  westward 

*  From  the  Fortnightly  Review,  February,  1918. 

243 


244  FRANCE’S  POSITION  AND  FUTURE 


and  conquered  Gaul  and  Spain.  They  turned  to  the  south, 
invaded  Italy,  and  in  410,  under  Alarich,  stormed  and 
plundered  Rome  and  destroyed  the  Western  Roman 
Empire.  Their  successors  subjected  Italy,  France,  part 
of  Spain  and  vast  territories  in  the  East  peopled  by  Slavs 
and  Magyars.  Charlemagne,  the  King  of  the  Franks, 
conquered  and  ruled  the  countries  from  the  Ebro  to  the 
Oder  and  the  Danube  on  the  one  hand,  and  from  the 
English  Channel  and  the  Bay  of  Biscay  to  the  centre  of 
Italy  on  the  other  hand.  He  was  the  most  powerful 
monarch  of  his  time.  He  was  solemnly  crowned  Roman 
Emperor  by  the  Pope  in  Rome  in  the  year  800.  He 
received  significantly  the  double  crown,  the  crown  urbis 
et  orbis.  He  became  the  protector  of  the  Christian  faith, 
of  the  Pope,  of  the  Church  Universal.  He  was  given 
symbolically  the  key  of  the  Holy  Sepulchre  of  Jerusalem. 
He  created  “  The  Roman  Empire  of  German  Nationality,” 
and  adopted  the  title  Carolus  serenissimus  Augustus ,  a 
Deo  coronatus  magnus  et  pacificus  imperator  Romanorum 
gubernans  imperium.  Charles  the  Great  and  his  successors 
claimed  to  be  the  lawful  heirs  and  successors  of  Caesar 
and  Augustus  (Kaiser  means  Caesar),  the  lords  of  the 
world.  Incidentally,  it  should  be  observed  that  by 
destroying  the  Roman  Empire  and  uprooting  Roman 
civilisation  the  Germans  plunged  the  world  into  the  night 
of  barbarism  and  savagery  and  put  back  the  clock  of 
civilisation  by  at  least  a  thousand  years. 

The  Germans  are  a  very  numerous,  a  very  prolific 
and  a  very  warlike  race.  German  rulers,  German  states¬ 
men,  German  thinkers  and  German  patriots  have  during 
more  than  a  thousand  years  hoped  and  fought  for  the 
reconstitution  of  a  German  Empire  dominating  the 
world,  similar  to  the  realms  of  Charlemagne  and  of  Otto 
the  Great.  The  Habsburgs  tried  in  vain  to  obtain  the 
dominion  of  the  world.  Their  failure  in  the  time  ol 


FRANCE’S  POSITION  AND  FUTURE 


245 


Charles  V.  was  due  to  France’s  determined  opposition, 
without  which  they  would  probably  have  succeeded. 
The  old  Habsburg  motto,  Austrice  est  im'perare  orbi  uni¬ 
verse >,  which  was  first  used  by  the  Emperor  Frederick  III., 
may  still  be  found  on  Habsburg  palaces  abbreviated 
to  “  A.E.I.O.U.”  The  Prussian  Hohenzollerns  have 
made  themselves  German  Emperors  in  the  place  of  the 
Habsburgs.  They  consider  themselves  the  heirs  of  the 
realms  and  of  the  world-embracing  aims  of  Charles  V., 
of  Otto  the  Great,  of  Charlemagne,  of  Augustus  and  of 
Caesar.  They  will  certainly  try  to  recreate  the  German 
universal  monarchy  of  the  past. 

History  teaches  us  that  the  character  of  nations  is 
singularly  stable  and  unchanging.  The  German  people, 
the  English  people  and  the  Fiench  people  have  faithfully 
preserved  the  national  traits  described  to  us  by  Tacitus, 
Caesar  and  other  historians  two  thousand  years  ago. 
Even  if  the  present  War  should  end  in  Germany’s  complete 
defeat,  in  the  disappearance  of  the  Hohenzollern  dynasty 
in  the  disintegration  of  the  German  Empire,  and  in  the 
establishment  of  a  German  Republic  or  several  German 
Republics,  the  German  nation  may  never  forget  its 
ancient  power,  pre-eminence  and  glory,  and  its  successful 
resistance  against  a  world  in  arms.  The  people  may 
again  become  united  and  renew  the  struggle  for  world 
supremacy.  Under  other  leaders  the  Germans  may  try 
once  more  to  establish  their  paramountcy  throughout 
the  world,  and  they  may,  in  the  struggle,  destroy  modern 
civilisation  as  completely  as  they  destroyed  the  civilisa¬ 
tion  of  antiquity  in  the  time  of  the  Goths  and  the  Vandals, 
the  Franks  and  the  Lombards.  Such  an  event  may  seem 
improbable,  but  is  by  no  means  impossible.  No  cultured 
Roman  would  have  believed  that  the  German  barbarians 
would  destroy  the  Roman  Empire  and  its  civilisation, 

17 


246  FRANCE’S  POSITION  AND  FUTURE 


Roman  organisation  and  the  Roman  law,  and  that  the 
Latin  language  would  disappear.  Therefore  the  interest, 
not  only  of  democracy,  which  is  merely  a  form  of  govern¬ 
ment  and  comparatively  unimportant,  but  of  human 
civilisation  and  of  human  liberty,  which  are  all-important, 
requires  the  creation  of  conditions  which  will  prevent 
another  German  attack  upon  the  world.  Such  an  attack 
can  be  prevented  only  if  there  is  in  Europe  an  efficient 
counterpoise  to  Germany. 

The  German  race  has  been  greatly  favoured  by  Nature. 
It  is  numerically  very  strong,  it  is  exceedingly  prolific,  it 
is  very  warlike,  and  it  occupies  a  most  excellent  strategical 
position  in  the  centre  of  the  European  Continent.  Be¬ 
sides,  the  Germans  can  greatly  add  to  their  numbers  by  a 
successful  policy  of  denationalisation  and  of  Germanisa- 
tion,  especially  among  the  racially  related  peoples  around 
them.  Lastly,  the  Germans  control  vast  natural  re¬ 
sources,  especially  coal  and  iron,  which  provide  wealth 
and  weapons  for  war.  The  Russian  Empire,  which  was 
formerly  considered  to  be  the  most  powerful  factor- 
barring  Germany’s  expansion  and  preventing  her  aggres¬ 
sion,  has  broken  down  and  has  been  dissolved  into  its 
component  parts,  into  an  anarchy,  into  a  number  of 
quarrelling  fragments  which  may  or  may  not  become 
self-governing  States.  For  all  we  know,  Russia  may 
never  again  be  reunited.  Germany,  even  if  defeated,  will 
certainly  endeavour  to  strengthen  her  union  with  Austria- 
Hungary,  and  especially  with  the  German  parts  of  the 
Dual  Monarchy  which  lie  near  her  frontier.  Besides,  she 
will  certainly  endeavour  to  prevent  a  Russian  reunion. 
She  will  play  off  one  Russian  State  against  the  other,  and 
will  strive  to  convert  large  portions  of  Russia,  and,  if 
possible,  all  Russia,  into  a  German  colony  or  a  German 
protectorate.  We  must  therefore  reckon  with  the 


FRANCE’S  POSITION  AND  FUTURE 


247 


possibility  that  after  the  War,  apart  from  a  Greater 
Germany  which  includes  Austria,  the  only  Great  Powers 
which  will  be  left  on  the  Continent  of  Europe  may  be 
France  and  Italy.  Will  these  two  Powers  be  strong 
enough  to  hold  Germany  in  check  with  the  help  of  the 
Anglo-Saxon  nations,  or  will  France  and  Italy  also  fall 
under  German  domination  ? 

The  strength  of  nations  depends  on  the  number  of 
their  inhabitants  and  on  their  intellectual,  moral  and 
material  resources.  The  present  struggle  has  shown  the 
paramount  importance  of  two  factors  in  warfare — of  man¬ 
power,  which  provides  large  armies,  and  of  industrial 
strength,  which  furnishes  the  fighting  millions  with  the 
weapons,  munitions,  transport  and  supplies  they  require. 
France  has  borne  the  brunt  of  the  German  attack.  She 
is  militarily  stronger  than  Italy,  and,  as  Russia  has  been 
eliminated  as  a  military  factor,  it  is  of  the  greatest  impor¬ 
tance  to  the  Allies  and  to  the  world  that  France  should  be 
able  to  hold  Germany  in  check,  should  that  country 
desire  to  embark  upon  another  war;  that  France  should 
be  so  strong  as  to  deter  Germany  from  renewing  the 
struggle. 

Military  power  is  based  upon  man-power  and  upon 
industrial  power.  Let  us  consider  each  of  these 
factors. 

A  comparison  of  man-power  in  the  two  countries  shows 
that  with  regard  to  men  France  is  vastly  inferior  to 
Germany.  During  the  last  hundred  years,  for  which 
exact  comparative  statistics  can  be  given,  France’s 
position  with  regard  to  Germany  has  grown  more  and 
more  unfavourable,  as  may  be  seen  from  the  following 
figures,  which  are  based  upon  the  French  and  German 
Censuses,  and  which  have  been  extracted  from  the  official 
statistical  year  books  of  the  two  countries : 


248  FRANCE’S  POSITION  AND  FUTURE 


Year. 

Germany  within  its 
Present  Limits. 

Prance  ( since  1871, 
without 

A  Isace-Lorraine). 

1816 

24,833,000 

29,480,000 

1830 

29,520,000 

32,370,000 

1850 

35,397,000 

35,630,000 

1870 

40,818,000 

38,440,000 

1871 

40,997,000 

36,190,000 

1881 

45,421,000 

37,590,000 

1891 

49,762,000 

38,350,000 

1901 

56,874,000 

38,980,000 

1911 

65,359,000 

39,602,000 

In  1816  France  had  about  4,500,000  more  inhabitants 
than  Germany.  In  1911  Germany  had  nearly  26,000,000 
more  inhabitants  than  France.  A  line  divides  the  table 
into  two  parts,  one  from  1816  to  1870  and  one  from  1871 
to  1911.  It  will  be  noticed  that  the  year  1870  is  a  very 
important  date  both  for  France  and  for  Germany.  Since 
that  year  the  difference  in  the  population  of  the  two 
countries  has  suddenly  and  very  greatly  been  accentuated. 
During  the  fifty -four  years  from  1816  to  1870  Germany’s 
population  increased  by  16,000,000,  but  during  the  forty 
years  from  1871  to  1911  it  increased  by  24,500,000,  or  at 
a  greatly  accelerated  rate.  During  the  fifty-four  years 
from  1816  to  1870  France’s  population  increased  by 
7,000,000,  but  during  the  forty  years  from  1871  to  1911 
it  increased  by  only  3,500,000,  or  at  a  very  reduced  rate. 
The  Franco-German  War  of  1870-1871  was  apparently 
eminently  favourable  to  the  increase  of  Germany’s 
population  and  exceedingly  unfavourable  to  that  of  the 
French  population.  The  reason  for  this  curious  difference 
will  be  discussed  later  on. 

Ever  since  1816  the  population  of  France  has  been 
increasing  at  a  much  slower  rate  than  that  of  Germany 


FRANCE’S  POSITION  AND  FUTURE 


249 


Examination  of  the  yearly  increment  for  all  the  years 
since  the  end  of  the  Napoleonic  War,  which  may  be  found 
in  the  Annuaire  Statisque  de  la  France ,  shows  that  the 
French  population,  which  increased  at  a  fairly  rapid  rate 
after  the  Peace  of  Paris,  tends  to  increase  more  and  more 
slowly  as  the  years  go  by — that  it  is,  in  fact,  approaching 
the  point  of  stagnation  and  of  decline.  Up  to  1867 
yearly  increases  of  from  100,000  to  200,000  were  the  rule. 
Of  late  such  increases  have  become  quite  exceptional. 
Between  1878  and  1910  the  surplus  of  births  over  deaths 
exceeded  100,000  only  twice  and  very  slightly.  As  a 
rule  the  excess  of  births  over  deaths  per  year  was  only 
about  60,000,  whereas  it  was  about  800,000  in  Germany. 
In  some  years  the  French  population  did  not  increase  at 
all,  but  actually  declined,  the  number  of  deaths  being 
greater  than  that  of  births.  In  1890,  for  instance 
France’s  population  declined  by  39,000,  in  1891  by 
11,000,  in  1892  by  20,000,  in  1895  by  18,000,  in  1900  by 
26,000,  and  in  1907  by  19,000.  Although  France  has 
practically  no  emigration,  but  receives  every  year  large 
numbers  of  immigrants  from  other  countries,  the  popula¬ 
tion  of  the  country  tends  towards  stagnation,  if  not 
towards  actual  decline.  In  view  of  the  fact  that  Germany ’s 
population  is  rapidly  increasing,  the  stagnation  of  the 
French  population  seems  very  alarming.  If  the  popula¬ 
tion  of  the  two  countries  should  increase  at  the  same  rate 
at  which  it  has  increased  between  1871  and  1911,  Germany 
should  in  1951  have  about  105,000,000  inhabitants  and 
France  only  43,000,000  inhabitants.  There  would  then 
be  twenty-five  Germans  to  every  ten  Frenchmen.  Many 
Germans  who  have  compared  the  increase  of  the  popula¬ 
tion  in  Germany  and  in  France  have  confidently  predicted 
that  in  half  a  century  France  will  be  a  second-  or  third- 
rate  Power,  another  Belgium — that  the  present  is  France’s 
last  war. 


250  FRANCE’S  POSITION  AND  FUTURE 


Many  scientists,  politicians  and  publicists  who  -  have 
studied  the  remarkable  stagnation  of  the  French  popula¬ 
tion  and  the  alarming  reduction  in  the  French  birth-rate 
have  ascribed  the  increasing  barrenness  of  France  to  the 
Code  Civil  which  provides  for  the  equal  division  of 
property  among  children  at  the  father’s  death,  to  the 
frequency  of  divorces,  to  the  prevalence  of  alcoholism, 
and  especially  to  the  drinking  of  absinthe,  to  irreligious¬ 
ness — in  the  deeply  religious  Finisterre  the  population 
increases  comparatively  rapidly — to  the  national  egotism, 
to  the  Napoleonic  Wars,  to  the  general  prosperity  of  the 
French,  or  to  the  decadence  of  the  race.  Racial  decadence 
is  most  frequently  given  as  the  cause  by  France’s  enemies, 
especially  by  the  Germans.  The  French  race  has  cer¬ 
tainly  not  grown  sterile.  That  may  be  seen  by  the 
example  of  the  French  Canadians.  In  1763,  when 
Canada  fell  to  England,  65,000  French  people  lived  in  the 
country.  At  the  Census  of  1910,  385,083  born  French 
Canadians  lived  in  the  United  States  alone.  If  we  add 
to  these  the  French  Canadians  living  in  Canada  and  the 
French  Canadians  born  from  French-Canadian  parents 
living  in  the  United  States,  it  appears  that  the  65,000 
French  of  1763  have  increased  so  much  that  they  number 
now  between  2,000,000  and  3,000,000.  The  latter  figure 
is  that  which  was  given  to  me  in  Canada.  If,  however, 
we  estimate  that  there  are  only  2,500,000  French 
Canadians,  it  would  appear  that  since  1763  the  French 
in  Canada  have  increased  fortyfold.  In  1763  there  dwelt 
in  France  21,769,163  French  people.  If  their  number 
had  increased  at  a  similar  ratio  there  would  now  be  in  th : 
world  800,000,000  Frenchmen.  France  would  dominate 
the  world.  The  Napoleonic  Wars  are  scarcely  responsible 
for  France’s  low  birth-rate,  for  Germany,  Spain  and  other 
countries  lost  in  them  about  as  large  a  proportion  of  men 
as  did  France.  Alcoholism,  divorces,  etc.,  prevail  in 


FRANCE’S  POSITION  AND  FUTURE 


251 


other  countries  as  well.  Consequently  they  cannot  be 
held  responsible. 

The  stagnation  of  France’s  population  is  certainly  not 
due  to  egoism,  to  general  prosperity  and  love  of  ease  and 
comfort  among  the  French,  as  is  widely  believed.  The 
wealth  of  France  is  usually  greatly  over-estimated.  The 
French  are  reputed  to  be  exceedingly  wealthy  because 
they  are  extremely  thrifty,  and  because  they  have,  as  a 
rule,  a  great  deal  of  ready  cash  which  they  are  willing  to 
lend  to  foreign  nations.  They  possess  so  much  ready  cash 
and  lend  it  abroad  because  the  French  industries  are 
stagnant  and  require  little  additional  capital.  The 
yearly  surplus  of  income  over  expenditure  in  France  is, 
after  all,  not  very  large.  It  is  much  smaller  than  it  is 
in  Germany  and  in  the  United  States.  In  Germany  and 
in  the  United  States  the  rapidly  expanding  industries 
absorb  the  huge  yearly  surplus  of  income  over  expendi¬ 
ture.  Hence  both  these  States  habitually  borrowed 
money  abroad,  partly  from  France.  Their  abounding 
prosperity  causes  money  to  be  scarce  and  dear.  The 
decline  of  the  French  birth-rate  is  due,  not  to  the  pros¬ 
perity  of  the  people,  which  is  largely  a  fiction,  but, 
incredible  as  it  may  seem,  to  their  poverty.  In  1906 
the  birth-rate  among  the  three  great  classes  of  the  French 
people  was  as  follows,  per  hundred  families : 

Among  employers  . .  . .  . .  . .  295 

Among  salary-earners  . .  . .  . .  . .  199 

Among  wage-earners  . .  . .  . .  . .  284 

It  will  be  noticed  that  the  birth-rate  is  greatest  among 
the  families  of  employers.  The  wage-earners  come  next, 
and  the  salary-earners,  miserably  paid  officials,  clerks, 
etc.,  have  by  far  the  smallest  number  of  children.  Ac¬ 
cording  to  the  French  statistics,  sterile  marriages  in  1906 
stood  in  the  following  proportion : 


252 


FRANCE’S  POSITION  AND  FUTURE 


Among'employers  ~ 
Among  salary-earners  . . 
Among  wage-earners 


101 

194 

134 


It  will  be  noticed  that  sterility  in  marriage  is  by  far 
smallest  among  employers  and  by  far  greatest  among 
salary-earners,  who  earn  a  workman’s  wage  or  less,  but 
have  to  keep  up  appearances  at  considerable  cost.  It 
seems  probable  that  the  stagnation  of  the  French  popu¬ 
lation  is  due,  not  to  the  causes  which  are  usually  given, 
but  to  the  difficulty  of  making  a  living  in  France.  I 
shall  show  in  the  following  pages  that  prosperity,  far  from 
leading  to  a  reduction  in  the  birth-rate,  leads  to  its  rapid 
increase. 

Although  much  has  been  written  on  the  problem  of 
population,  it  appears  that  the  laws  which  regulate  the 
birth-rate  are  insufficiently  understood  by  the  scientists 
and  publicists  of  the  present.  Adam  Smith  wrote,  with 
his  usual  shrewd  common  sense,  in  Book  I.,  chapter  viii., 
of  The  Wealth  of  Nations: 

The  demand  for  those  who  live  by  wages  necessarily 
increases  with  the  increase  of  the  revenue  and  stock  of 
every  country  and  cannot  possibly  increase  without  it.  .  .  . 
The  most  decisive  mark  of  the  prosperity  of  any  country 
is  the  increase  of  the  number  of  its  inhabitants.  .  .  . 

The  value  of  children  is  the  greatest  of  all  encourage¬ 
ments  to  marriage.  We  cannot,  therefore,  wonder  that 
the  people  in  North  America  should  generally  marry 
very  young.  Notwithstanding  the  great  increase  occa¬ 
sioned  by  such  early  marriages,  there  is  a  continual 
complaint  of  the  scarcity  of  hands  in  North  America. 
The  demands  for  labourers,  the  funds  destined  for  main¬ 
taining  them,  increase,  it  seems,  still  faster  than  they 
can  find  labourers  to  employ.  .  .  . 

The  demand  for  men,  like  that  for  any  other  commo¬ 
dity,  necessarily  regulates  the  production  of  men;  quickens 
it  when  it  goes  on  too  slowly  and  stops  it  when  it  advances 


FRANCE’S  POSITION  AND  FUTURE  253 


too  fast.  .  .  .  The  liberal  reward  of  labour,  therefore, 
aa  it  is  the  effect  of  increasing  wealth,  so  it  is  the  cause 
of  increasing  population. 

Adam  Smith’s  phrase,  “  The  demand  for  men,  like  that 
for  any  other  commodity,  necessarily  regulates  the  pro¬ 
duction  of  men;  quickens  it  when  it  goes  on  too  slowly, 
and  stops  it  when  it  advances  too  fast,”  describes  con¬ 
cisely  and  correctly  the  principal  influence  which  deter¬ 
mines  the  increase,  stagnation  or  decline  of  population 
in  States.  As  the  number  of  animals  depends  mainly 
on  the  quantity  of  food  available,  and  as  they  increase 
when  food  is  abundant  and  diminish  when  it  becomes 
scarce,  even  so  the  number  of  men  depends  on  the  quantity 
of  work  available,  for  earnings  can  be  converted  into 
food  and  shelter.  It  follows  that  population  increases 
everywhere  pari  passu  with  the  increase  in  the  oppor¬ 
tunities  of  making  a  living.  In  other  words,  national 
fertility  depends  principally  on  a  very  commonplace 
factor,  on  the  natural  resources  of  countries  and  their 
exploitation  by  man.  Rapidly  increasing  labour-employ¬ 
ing  industries  require  a  correspondingly  rapid  increase 
of  workers.  The  vast  demand  for  workers  in  America 
has  caused  the  French  Canadians  to  increase  fortyfold 
in  a  century  and  a  half,  and  has  caused  the  population 
of  the  United  States  to  grow  from  3,929,214  in  1790  to 
91,972,266  in  1910. 

On  the  boundless  and  very  thinly  inhabited  virgin 
soil  plains  of  America  population  can  grow  rapidly  merely 
by  the  expansion  of  agriculture.  That  is  proved  by  the 
example  of  Canada,  the  United  States,  Argentina,  etc. 
In  the  densely  populated  countries  of  Europe,  on  the  other 
hand,  where  there  are  no  prairies  which  can  be  converted 
into  ploughed  fields,  the  number  of  men  who  live  by 
agriculture  cannot  increase  very  considerably,  even 
if  agricultural  production  increases,  for  with  the  help  of 


254 


FRANCE’S  POSITION  AND  FUTURE 


steam  ploughs,  drills,  milking  machinery,  separators 
and  other  machines,  an  agricultural  worker  can  now  do 
as  much  work  as  was  formerly  done  by  several.  How 
extraordinarily  the  development  of  the  manufacturing 
industries  may  influence  the  increase  of  population  may 
be  seen  from  the  following  figures,  which  have  been 
extracted  from  Porter’s  Progress  of  the  Nation  and  the 
British  and  French  Government  Statistics : 


Inhabitants  of  England  and 
Wales. 

Inhabitants  of  France. 

1600 

4,811,718 

1600 

* 

1700 

6,045,008 

1700 

.  .  19,669,322* 

1760 

6,479,730 

1762 

.  .  21,769,163 

1780 

7,814,827 

1784 

.  .  24,800,000 

1801 

8,872,980 

1801 

.  .  27,500,000 

1811 

10,163,676 

1811 

.  .  29,350,000 

1821 

11,978,875 

1821 

.  .  30,450,000 

1831 

13,894,574 

1831 

.  .  32,570,000 

1841 

16,011,757 

1841 

.  .  34,230,000 

1851 

17,914,768 

1851 

.  .  35,800,000 

1861 

20,060,925 

1861 

.  .  37,390,000 

1871 

22,704,108 

1871 

. .  36,190,000 

1881 

25,974,439 

1881 

.  .  37,590,000 

1891 

29,001,018 

1891 

.  .  38,350,000 

1901 

32,527,843 

1901 

.  .  38,980,000 

1911 

36,070,492 

1911 

. .  39,602,000 

Between  1700  and  1760,  when  England  and  Wales 
lived  chiefly  by  a  prosperous  and  rapidly  expanding 
agriculture,  the  population  of  the  country  was  practically 
stagnant.  It  increased  by  only  8  per  cent,  during  the 
time.  In  the  course  of  the  next  forty  years,  between 
1760  and  1801,  when  the  industrial  revolution,  the  machine 
era,  began,  it  grew  by  37  per  cent.  Between  1600  and 
1800  it  increased  by  only  about  80  per  cent-.,  or  by  40 
per  cent,  per  century.  On  the  other  hand,  since  the 
beginning  of  the  nineteenth  century,  since  the  time  when 
Great  Britain  replaced  hand  labour  by  machine  labour 
and  became  a  manufacturing  country,  the  population  of 

*  Vauban’s  Estimate. 


FRANCE’S  POSITION  AND  FUTURE 


255 


England  and  Wales  has  increased  by  more  than  300  per 
cent.  Since  1801  it  has  fully  quadrupled,  although 
during  that  period  there  was  a  very  large  emigration 
from  England  and  Wales,  and  although  British  agriculture 
gave  employment  to  greatly  reduced  numbers  of  workers, 
partly  owing  to  the  decline  of  agricultural  production 
during  the  second  half  of  the  nineteenth  century,  partly 
owing  to  the  introduction  of  labour-saving  agricultural 
machinery.  The  rapid  increase  of  the  British  population 
which  previously  had  grown  with  extreme  slowness, 
shows  that  the  introduction  of  machinery  increased  not 
only  the  output  of  goods,  but  also  that  of  men,  in  accor¬ 
dance  with  Adam  Smith’s  dictum. 

During  the  eighteenth  century  and  the  beginning  of 
the  nineteenth  century,  when  both  France  and  England 
were  chiefly  agricultural  countries,  the  population  of  the 
two  States  progressed  at  almost  the  identical  rate,  as  is 
shown  by  the  figures  given  above.  Nobody  spoke  then 
of  the  infertility  of  the  decadence  of  the  French  race. 
Between  1700  and  1811  France  had,  as  is  shown  by  the 
reliable  statistics  given,  about  three  times  as  many  in¬ 
habitants  as  had  England  and  Wales.  Since  1811  a  tre¬ 
mendous  change  has  occurred.  In  1911  the  population  of 
France  was  only  10  per  cent,  larger  than  that  of  England 
and  Wales,  and  by  1921  England  and  Wales  may  have 
drawn  level  with  France  in  respect  of  population.  The 
economic  factor  has  vastly  accelerated  the  increase  of 
population  in  the  one  country  and  has  retarded  that 
of  the  other  country. 

If  we  study  analytically  the  British  Census  Returns 
for  a  long  number  of  years,  it  appears  that  the  colossal 
increase  in  the  British  population  has  taken  place  almost 
entirely  in  the  towns;  that  the  country  population, 
exclusive  of  retired  townsmen,  suburban  dwellers,  etc., 
has  remained  stagnant;  that  but  for  the  introduction 


256  FRANCE’S  POSITION  AND  FUTURE 


of  the  manufacturing  industries  France  would  still  contain 
three  times  as  many  people  as  England  and  Wales.  In 
1801  Manchester  and  Salford,  which  now  have  more  than 
1,000,000  inhabitants,  had  only  94,876  people;  Liverpool, 
with  about  800,000  inhabitants  had  82,295  people; Leeds, 
with  500,000  inhabitants,  had  53,162  people;  Sheffield, 
with  500,000  inhabitants,  had  45,755  people,  etc. 

The  slow  increase  of  the  French  population  and  the 
rapid  increase  of  the  English  and  German  population 
is  due  to  the  fact  that  France,  though  possessing  a  very 
flourishing  agriculture,  has  comparatively  unimportant 
and  somewhat  stationary  industries,  while  England  and 
Germany  possess  manufacturing  industries  which  have 
enormously  and  very  rapidly  expanded.  The  gigantic 
growth  of  their  manufacturing  industries  has  enabled 
England  and  Germany  to  nourish  vastly  increased 
numbers,  and  has  brought  about  the  remarkable  increase 
in  population. 

Let  us  now  inquire  why  Germany’s  population  has 
grown  so  vastly  within  recent  times. 

During  the  last  few  decades  Germany’s  agricultural 
production  has  more  than  doubled,  as  the  following  figures 
show: 

Production  of — 


Y  ear. 

Bye. 

Wheat. 

Oats. 

Potatoes. 

Sugar. 

1880  .. 

Tons. 

4,952,525 

Tons. 

2,345,278 

Tons. 

4,228,128 

Tons. 

19,466,242 

Tons. 

415,000 

1913  .. 

12,222,394 

4,655,956 

9,713,965 

54,121,146 

2,632,282 

Between  1880  and  1913 — the  latter  was  a  particularly 
prolific  year — not  only  the  production  of  the  great  staple 
crops  enumerated  above,  but  that  of  meat  also,  has  fully 


FRANCE’S  POSITION  AND  FUTURE  257 


doubled,  owing  to  the  application  of  science  to  industry. 
No  similar  progress  has  taken  place  in  any  other  European 
country.  It  might  therefore  be  expected  that  Germany’s 
agricultural  workers,  and  her  rural  population  as  well, 
should  have  greatly  increased  in  numbers.  As  a  matter 
of  fact,  both  Germany’s  rural  population  and  her  rural 
workers  have  numerically  declined,  the  vast  increase  of 
output  notwithstanding.  The  colossal  increase  of  the 
population  which  has  taken  place  in  Germany  has  been 
confined  exclusively  to  the  towns,  and  it  has  been  particu¬ 
larly  great  in  the  large  towns,  in  the  important  manufac¬ 
turing  centres.  An  analysis  of  the  German  Censuses 
yields  the  following  illuminating  and  surprising  picture : 


Y  ear. 

In  Towns  of 
100,000  and 
More. 

/ 

In  Towns  of 
20,000 
to  100,000. 

In  Towns  from 
5,000 
to  20,000. 

1871  .. 

1,968,537 

3,147,272 

4,588,364 

1880  .. 

3,273,144 

4,027,085 

5,671,32 5 

1890  . . 

6,314,268 

4,674,786 

6,321,752 

1900  .. 

9,120,280 

7,111,447 

7,585,495 

1910  .. 

13,823,348 

8,677,955 

9,172,333 

Year. 

In  Towns 
from  2,000 
to  5,000. 

In  All  Towns. 

In  Localities 
of  Less  than 
2,000. 

1871  .. 

5,190,801 

14,894,974 

26,163,818 

1880  .. 

5,784,976 

18,720,530 

26,513,531 

1890  .. 

5,931,186 

23,241,992 

26,186,478 

1900  .. 

6,815,853 

30,633,075 

25,734,103 

1910  .. 

7,297,770 

38,971,406 

25,954,587 

The  rural  population  of  Germany,  the  people  who  live 
in  townlets  and  villages  of  2,000  inhabitants  and  less, 


258 


FRANCE’S  POSITION  AND  FUTURE 


were  in  1910  actually  less  numerous  than  they  were  in 
1871  !  During  the  same  time  the  population  of  all  towns 
of  more  than  2,000  inhabitants  has  grown  from  14,894,974 
to  38,971,406,  or  by  163  per  cent.  In  the  towns  of  from 
2,000  to  5,000  people  the  population  has  increased  by 
only  40  per  cent.,  in  the  towns  of  from  5,000  to  20,000 
inhabitants  it  has  grown  by  100  per  cent.,  in  the  towns 
of  from  20,000  to  100,000  it  has  increased  by  175  per  cent., 
and  in  the  towns  of  100,000  inhabitants  and  more  it  has 
grown  by  no  less  than  610  per  cent. 

As  general  statements  are  not  as  illuminating  as  are 
concrete  detailed  examples,  I  would  further  illustrate 
the  cause  of  the  rapid  growth  of  Germany’s  population. 
I  would  now  give  the  record  of  the  principal  German 
towns,  which  will  best  enable  us  to  visualise  and  to  under¬ 
stand  the  causes  of  the  marvellous  increase  of  Germany’s 
population  and  national  wealth.  The  figures  given  are 
taken  from  the  German  Censuses : 


Year. 

Berlin. 

Hamburg. 

Munich. 

Leipzig. 

Dresden. 

1875 

966,858 

264,671 

193,024 

127,387 

197,295 

1880 

1,122,330 

289,859 

230,023 

149,081 

220,818 

1890 

1,578,794 

569,260 

350,594 

357,122 

276,522 

1900 

1,888,848 

705,738 

499,932 

456,124 

396,146 

1910 

2,071,257 

931,035 

596,467 

589,850 

548,308 

Year. 

Cologne. 

Breslau. 

Frankfurt. 

r  . . 

Diissel- 

dorf. 

Nurem¬ 

berg. 

1875 

135,371 

239,050 

103,136 

80,695 

91,018 

1880 

144,772 

272,912 

136,819 

95,458 

99,519 

1890 

281,681 

335,186 

179,985 

144,642 

142,590 

1900 

372,529 

422,709 

288,989 

213,711 

261,081 

1910 

' — -'i«—  -  — . . . 

516,527 

512,105 

414,576 

358,728 

333,142 

FRANCE’S  POSITION  AND  FUTURE  259 


Year. 

C  harlot - 
tenburg. 

Hanover. 

Essen. 

Chemnitz. 

Stuttgart. 

i  875 

25,847 

106,677 

54,790 

78,209 

107,273 

1880 

30,483 

122,843 

56,944 

95,123 

117,303 

1890 

76,859 

174,455 

78,706 

138,954 

139,817 

1900 

189,305 

235,649 

118,862 

206,913 

176,699 

1910 

305,978 

302,375 

294,653 

287,807 

286,218 

Year. 

Magde¬ 

burg. 

Bremen. 

Konigs- 

berg. 

Stettin. 

Duisburg. 

1875 

87,925 

102,532 

122,636 

80,972 

37,380 

1880 

97,539 

112,453 

140,909 

91,756 

41,242 

1890 

202,235 

130,875 

161,666 

116,228 

59,258 

1900 

229,667 

163,297 

189,483 

210,702 

92,730 

1910 

279,629 

247,437 

245,994 

236,113 

229,483 

Year. 

Dortmund. 

Kiel. 

Mann¬ 

heim. 

Altona. 

Elberfeld. 

1875 

57,742 

37,246 

46,453 

84,097 

80,589 

1880 

66,554 

43,594 

53,465 

91,047 

93,538 

1890 

89,663 

69,172 

79,058 

143,241 

125,899 

1900 

142,733 

121,824 

141,131 

161,501 

156,966 

1910 

214,226 

211,627 

193,902 

172,628 

170,195 

t 


Year. 

Gelsen¬ 

kirchen. 

Barmen. 

Cassel. 

Bochum. 

Mulheim 
a.d.  Buhr. 

1875 

f  11,295! 

86,504 

53,043 

28,368 

15,277 

1800 

1  14,615  i 

95,941 

58,290 

33,440 

22,146 

1890 

i  28,057 

116,144 

72,477 

47,601 

27,903 

1900 

1  36,935 

141,944 

106,034 

65,551 

38,280 

1910 

^169,513 

169,214 

153,196 

136,931 

112,580 

Beyond  the  thirty  towns  for  which  statistics  are  given, 
Germany  has  seventeen  other  towns  of  more  than  100,000 
inhabitants — viz.,  Aix-la-Chapelle,  Augsburg,  Schoneberg- 


260 


FRANCE’S  POSITION  AND  FUTURE 


Berlin,  Wilmersdorf-Berlin,  Neukolln-Berlin,  Brunswick, 
Crefeld,  Dantzig,  Erfurt,  Halle,  Hamborn,  Mayence, 
Plauen,  Posen,  Saarbriicken,  Strassburg,  Wiesbaden. 
Altogether  Germany  possesses  forty -seven  towns  of 
more  than  100,000  inhabitants,  or  almost  as  many  as 
the  United  Kingdom,  while  France  has  only  fifteen. 

A  glance  at  the  statistical  table  shows  that  all  the 
German  towns  have  grown  with  extraordinary  rapidity ; 
that  the  increase  of  population  has  been  least  great  in 
the  political  centres  and  the  residential  and  commercial 
towns,  Berlin  suburbs  such  as  Charlottenburg  excepted; 
and  that  it  has  been  fastest  in  the  manufacturing  towns, 
and  particularly  in  those  which  live  by  the  exploitation 
of  coal  and  iron.  Since  1875  the  population  of  Dortmund 
has  grown  fourfold,  that  of  Dusseldorf  four  and  a  half -fold, 
that  of  Bochum  fivefold,  that  of  Essen  five  and  a  half -fold, 
that  of  Duisburg  and  of  Kiel  (shipbuilding)  sixfold,  that 
of  Miilheim  a.d.  Ruhr  sevenfold,  that  of  Gelsenkirchen 
fifteenfold.  Hamborn,  between  Duisburg  and  Essen, 
which  was  a  village  a  few  decades  ago,  had  32,597  inhabi¬ 
tants  in  1900,  73,454  inhabitants  in  1905,  and  101,703 
inhabitants  in  1910.  All  the  towns  named  are  coal  and 
iron  centres,  and  all  but  Kiel  lie  close  together  in  the 
Ruhr  district. 

The  extraordinary  effect  of  coal  and  iron,  and  especially 
of  coal,  upon  population  may  be  seen  by  the  example 
of  the  Ruhr  coal  district.  On  and  around  that  district, 
on  territory  which  measures  about  forty  miles  by  twenty, 
an  area  which  is  about  as  large  as  a  small  English  county 
such  as  Nottinghamshire  or  Oxfordshire  or  Surrey,  may 
be  found  eleven  out  of  those  forty-seven  German  towns 
of  more  than  100,000  inhabitants.  These  are  Dusseldorf, 
Essen,  Duisburg,  Dortmund,  Elberfeld,  Gelsenkirchen, 
Barmen,  Bochum,  Miilheim  a.d.  Ruhr,  Crefeld,  Hamborn. 
In  addition  there  are  situated  in  the  district  named 


FRANCE’S  POSITION  AND  FUTURE  261 


fifty-five  towns  which  have  from  10,000  to  100,000 
inhabitants,  and  a  number  of  these  are  rapidly  approach¬ 
ing  the  100,000  limit.  This  narrow  district,  which 
resembles  a  gigantic  town,  is  the  greatest  centre  of  popu¬ 
lation  in  Germany.  It  was  inhabited  in  1905  by  4,840,143 
people  and  in  1910  by  5,818,237  people.  Its  population 
increased,  therefore,  by  practically  1,000,000  within  five 
years.  The  growth  of  the  German  towns  is  without  a 
parallel  in  the  world,  except  in  the  Western  States  of 
North  America.  Her  coal  and  iron  centres  are  Germany’s 
colonies.  Whereas  in  each  of  the  years  between  1905 
and  1910  about  200,000  Englishmen  left  their  homes  and 
settled  abroad,  about  as  many  Germans  left  their  homes 
and  settled  in  the  celebrated  Rhenish- Westphalian  coal 
and  iron  district. 

It  appears  that  in  the  densely  populated  countries 
of  Europe  the  increase  of  population  is  caused  chiefly 
by  the  expansion  of  the  manufacturing  industries,  that 
the  population  has  grown  rapidly  in  England  and  Germany 
owing  to  the  mighty  development  of  their  manufactures, 
and  that  the  French  population  has  increased  slowly, 
and  tends  now  towards  stagnation  and  decline,  owing 
to  the  insufficient  development  of  France’s  industrial 
power.  Some  believe  that  France’s  backwardness  in 
manufacturing  is  due  to  the  character  of  the  French, 
to  their  lack  of  enterprise,  lack  of  energy,  inborn  con¬ 
servativeness,  and  to  their  protective  tariff.  As  the  Ger¬ 
man  and  American  industries  have  grown  mightily  under 
rigid  Protection,  France’s  fiscal  policy  can  obviously 
not  be  held  responsible  for  her  industrial  backwardness. 
Nor  can  the  character  of  the  French  be  blamed.  The 
French  business  men  are  hard-working,  ambitious  and 
enterprising,  and  they  possess  much  originality  and  great 
inventive  power.  They  have  led  the  world  in  many 

branches  of  manufacturing,  and  particularly  in  those 

18 


262  FRANCE’S  POSITION  AND  FUTURE 


which  require  the  highest  artistic,  scientific  and  technical 
skill.  In  scientific  agriculture,  in  the  metallurgical 
industries,  in  the  making  of  machinery  of  every  kind, 
in  engineering,  in  the  electrical  and  chemical  industries, 
in  the  making  of  the  highest-class  textiles,  glass,  porcelain, 
optical  and  surgical  instruments,  etc.,  the  French  have 
led  the  world.  They  certainly  possess  the  energy,  inven¬ 
tiveness,  skill  and  ambition  which  are  required  for  indus¬ 
trial  success. 

The  economic  progress  of  nations  is  caused  partly  by 
the  qualities  of  their  inhabitants,  partly  by  geographical 
and  geological  factors.  Germany’s  wonderful  advance 
in  agriculture  and  industry  is  chiefly  due  to  Nature’s 
bounty.  Agriculture  is  carried  on  most  successfully 
on  level  ground.  North  Germany  is  a  gigantic  plain. 
One  can  travel  by  rail  from  the  Rhine  to  Berlin  and  thence 
to  Hamburg  or  to  Konigsberg  without  passing  through 
a  single  tunnel.  Agricultural  and  industrial  progress 
depends  very  largely  on  cheap  transport.  The  North 
German  plain  is  opened  up  by  a  wonderful  system  of  vast 
but  gentle  rivers,  which  have  a  parallel  course  and  which 
are  easily  navigable  for  hundreds  of  miles.  Moreover, 
Germany’s  agriculture  has  benefited  greatly  by  the  fact 
that  the  country  possesses  a  world  monopoly  in  her 
gigantic  deposits  of  soluble  potash,  which  are  invaluable 
for  intensive  agriculture.  We  can  therefore  not  wonder 
that  Germany’s  agricultural  production  has  doubled 
since  1880,  as  has  previously  been  shown.  While 
Germany  consists  chiefly  of  a  vast  plain,  and  while  she 
possesses  conditions  which  are  eminently  favourable  for 
agricultural  production  and  for  developing  a  system  of 
cheap  transport  by  rail  and  water,  the  advantage  of  which 
need  scarcely  be  pointed  out,  France  is  chiefly  moun¬ 
tainous,  and  her  turbulent  rivers,  such  as  the  mighty  Rhone, 
make  inland  navigation  extremely  difficult  and  costly. 


FRANCE’S  POSITION  AND  FUTURE 


263 


The  increase  of  national  population  depends  chiefly 
on  the  progress  of  the  manufacturing  industries,  and  the 
progress  of  these  depends  chiefly  on  the  production  of 
two  commodities,  of  coal  and  of  iron.  Cheap  iron  is 
indispensable  for  producing  cheaply  all  goods  made  of 
iron,  and  as  long  as  coal  continues  to  be  the  foundation 
of  all  manufacturing,  no  nation  can  hope  to  develop  power¬ 
ful  iron  industries  and  other  industries  unless  it  possesses 
an  abundance  of  cheap  coal.  Contrary  to  general  belief  , 
coal  is  used  chiefly,  not  for  domestic,  but  for  industrial 
purposes.  This  may  be  seen  from  the  estimate  of  British 
coal  consumption  in  1903  made  by  the  Royal  Commission 
on  Coal  Supplies : 


Coal  Consumption  in  the  United  Kingdom. 


Tons. 

Railways  (all  purposes) 

•  •  •  • 

13,000,000 

Coasting  steamers  (bunkers)  . 

•  •  •  ♦ 

2,000,000 

Factories 

•  •  •  • 

53,000,000 

Mines  . . 

•  •  •  • 

18,000,000 

Iron  and  steel  industries 

•  •  •  • 

28,000,000 

Other  Metals  and  Minerals  . . 

•  •  •  • 

1,000,000 

Brickworks,  potteries,  glass  works, 

chemical 

works 

•  •  •  • 

5,000,000 

Gasworks 

•  •  •  • 

15,000,000 

Domestic 

•  •  •  • 

32,000,000 

Coal  consumed  in  1903 — Grand 

Total  . . 

167,000,000 

It  will  be  noticed  that  only  a  very  small  portion  of  the 
coal  used  is  employed  for  domestic  purposes ;  that  coal  is 
used  chiefly  in  factories,  iron  and  steel  works,  chemical 
works,  transport,  etc. 

The  fact  that  the  industrial  progress  of  the  great  manu¬ 
facturing  nations  is  chiefly  due  to  their  wealth  in  coal 
may  be  seen  at  a  glance  from  the  following  figures,  which 
are  taken  from  the  Report  on  the  Coal  Resources  of  the 
World  of  1913: 


264 


FRANCE’S  POSITION  AND  FUTURE 


Production  of  Coal. 


Year. 

United 

States. 

Germany. 

United 

Kingdom. 

France. 

Tons. 

Tons. 

Tons. 

Tons. 

1865  .. 

24,790,000 

28,330,000 

99,760,000 

11,840,000 

1870  .. 

29,950,000 

34,880,000 

112,240,000 

13,330,000 

1875  .. 

48,200,000 

48,530,000 

135,490,000 

16,950,000 

1880  .. 

66,830,000 

59,120,000 

149,380,000 

19,360,000 

1885  .. 

112,180,000 

73,670,000 

161,960,000 

19,510,000 

1890  .  . 

141,620,000 

89,290,000 

184,590,000 

26,080,000 

1895  .. 

177,590,000 

103,960,000 

193,350,000 

28,240,000 

1900  .. 

243,410,000 

149,790,000 

228,770,000 

33,400,000 

1905  .. 

351,120,000 

173,660,000 

239,890,000 

36,050,000 

1910  .. 

445,810,000 

221,980,000 

264,500,000 

38,570,000 

1913  .. 

504,520,000 

273,650,000 

287,410,000 

40,190,000 

Industrial  progress  determines  population,  and  coal 
determines  industrial  progress.  Coal  is  the  mother  of 
industry  and  of  population.  If  England  should  be  sud¬ 
denly  deprived  of  her  coal,  the  population  would  starve  and 
would  rapidly  dwindle.  A  glance  at  the  figures  given 
shows  that  the  population  and  industrial  strength  of 
the  four  countries  named  have  increased  pari  passu  with 
their  coal  output.  Where  coal  production  has  increased 
most  rapidly,  wealth  and  population  have  grown  fastest. 
In  1865,  when  England  produced  far  more  coal  than  the 
United  States,  Germany  and  France  combined,  England’s 
industrial  supremacy  seemed  unchallengeable.  Since 
then  coal  production  in  the  United  States  and  in  Germany 
has  advanced  far  more  rapidly  than  in  England,  and  with 
the  slackening  in  the  output  of  coal  England’s  output 
of  manhood  has  slackened  as  well.  Coal  is  the  mother 
of  industry  and  of  population.  Coal  productio  and 
birth-rate  go  hand  in  hand. 

Coal  production  determines  general  production,  and 
especially  iron  production,  for  the  iron  industries  re- 


FRANCE’S  POSITION  AND  FUTURE  265 


quire  vast  quantities  of  coal.  In  the  principal  in¬ 
dustrial  countries  the  output  of  iron  has  increased  as 
follows  : 


Year . 

United 

States. 

Germany. 

United 

Kingdom. 

France. 

■ 

Tons. 

Tons. 

Tons. 

Tons. 

1865  .. 

845,000 

975,000 

4,896,000 

1,290,000 

1870  .. 

1,691,000 

1,391,000 

6,060,000 

1,173,000 

1875  .. 

2,056,000 

2,029,000 

6,432,000 

1,416,000 

1880  .. 

3,896,000 

2,729,000 

7,802,000 

1,733,000 

1885  .. 

4,111,000 

3,687,000 

7,369,000 

1,630,000 

1890  .. 

9,353,000 

4,658,000 

8,033,000 

1,962,000 

1895  .. 

9,597,000 

5,465,000 

7,827,000 

2,005,000 

1900  .. 

14,101,000 

8,521,000 

9,052,000 

2,699,000 

1905  .. 

23,360,000 

10,988,000 

9,746,000 

3,077,000 

1910  .. 

27,740,000 

14,793,000 

10,380,000 

4,001,000 

1913  .. 

30,966,000 

19,292,000 

10,260,000 

5,311,000 

During  the  period  under  consideration  Germany  and 
the  United  States,  which  in  1865  were  quite  unimportant 
as  iron  producers,  have  rapidly  overtaken  the  United 
Kingdom  in  iron  production ;  and  France,  which  produced 
in  1865  more  iron  than  the  United  States  and  Germany, 
produced  before  the  War  only  one-fourth  as  much  as 
Germany  and  one-sixth  as  much  as  the  United  States. 
The  reason  for  the  rapid  progress  in  Germany  and  for  the 
slow  advance  in  France  is  obvious.  While  Germany  is 
exceedingly  rich  in  the  most  valuable  minerals,  particu¬ 
larly  in  coal,  iron  and  potash,  France  is  very  poor  in 
minerals,  especially  in  coal.  The  most  reliable  coal 
statistics  available  are  those  which  were  put  before  the 
International  Geological  Congress  of  1913.  According 
to  the  Report  on  the  Coal  Resources  of  the  World  then 
published,  the  coal  existing  in  Europe  was  estimated  as 
follows : 


260  FRANCE’S  POSTTTON  AND  FUTURE 


In  France  . . 
In  Belgium 
In  Spain  . . 


In  United  Kingdom 
In  Russia 

In  Austria-Hungary 


In  Germany 


Tons. 

423,356,000,000 

189,535,000,000 

60,106,000,000 

59,269,000,000 

17,583,000,000 

11,000,000,000 


In  Spitzbergen 
In  Holland 
In  Balkan  States 
In  Italy  . . 

In  Sweden,  Denmark,  Portugal 


8,768,000,000 

8,750,000,000 

4,402,000,000 

996,000,000 

243,000,000 

184,000,000 


Total 


784,192,000,000 


It  will  be  noticed  that  Germany  possesses  about  55  per 
cent,  of  Europe’s  coal,  that  she  has  more  than  twice  as 
much  coal  as  all  the  other  Continental  States  combined, 
that  she  has  more  than  twice  as  much  coal  as  the  United 
Kingdom,  and  twenty -five  times  as  much  coal  as  France. 
We  can  therefore  not  wonder  at  France’s  industrial 
inferiority.  Little  Belgium  alone  is  almost  as  rich  in 
coal  as  is  France.  France  suffers  not  only  from  a  shortage 
of  coal;  the  little  coal  she  has  can  be  worked  only  with 
difficulty.  Unfortunately,  she  has  a  large  number  of 
small,  and  therefore  uneconomic,  coalfields,  and  the 
French  coal  strata  are  very  thin,  very  irregular,  and  full 
of  faults  owing  to  disturbance  of  the  ground.  There  are 
no  less  than  fifty  coal  districts  and  twenty  lignite  districts 
in  the  country.  Coal  is  worked  in  twenty-nine  depart¬ 
ments,  but  the  bulk  of  the  French  coal,  nearly  three- 
fourths  of  her  output,  comes  from  her  north-eastern 
territory,  which  is  at  present  in  German  hands.  Before 
the  War  French  coal  production  was  habitually  greatly 
below  France’s  needs.  Owing  to  the  shortage  of  coal 
and  the  difficulty  of  working  the  existing  mines,  coal  wa  s 
always  scarce  and  dear  in  France.  Industrial  prosperity 


FRANCE’S  POSITION  AND  FUTURE  267 


cannot  be  based  upon  insufficient  and  very  expensive 
coal.  France’s  shortage  of  coal  alone  explains  her 
industrial  backwardness. 

In  iron  ore  also  Germany  occupies  a  very  favoured 
position.  The  following  table  is  drawn  from  the  work, 
Iron  Ore  Resources  of  the  World,  which  was  placed  before 
the  International  Geological  Congress  of  1910: 


Ascertained  Reserves  of  Metallic  Iron. 


Tn  Germany  and  Luxemburg 

Tons. 

.  .  1,360,000,000 

In  France 

•  • 

.  .  1,140,000,000 

In  Sweden  . . 

740,000,000 

In  United  Kingdom 

455,000,000 

In  Russia 

387,200,000 

In  Spain 

349,000,000 

In  Norway  . . 

124,000,000 

In  Austria-Hungary 

103,500,000 

In  Greece 

45,000,000 

In  Belgium  . . 

25,000,000 

In  Italy 

3,300,000 

Total 

•  • 

. .  4,732,000,000 

Germany  has  by  far  the  largest  iron  deposits  in  Europe. 
France  comes  second.  Her  principal  ironfield,  that  of 
Briey,  the  importance  of  which  has  only  recently  been 
discovered,  lies  close  to  the  German  frontier  and  has  been 
seized  by  Germany.  The  important  iron  and  coal  mines 
of  Belgium,  of  Poland,  and  of  Western  Russia  also,  are 
in  Germany’s  hands.  Germany  intends  to  retain  the 
coal  and  iron  bearing  frontier  lands  upon  which  she  has 
seized.  That  has  been  announced  by  her  statesmen, 
her  Generals,  and  her  business  men.  As  Sweden  has 
apparently  fallen  under  Germany’s  control  with  regard 
to  the  supply  of  iron  ore,  it  appears  that  Germany  would 
absolutely  dominate  Europe  in  coal  and  iron  should  she 
be  able  to  retain  the  frontier  districts  which  she  has 


268  FRANCE’S  POSITION  AND  FUTURE 


overrun.  By  retaining  the  district  of  Briey  and  the  north¬ 
eastern  departments  of  France,  Germany  could  starve 
that  country  of  coal.  Being  deprived  of  the  necessary 
fuel,  France’s  industries  would  languish  and  decline, 
and  so  would  her  population,  for  industry  and  population 
go  hand  in  hand,  and  no  industrial  nation  can  continue 
to  exist  if  suddenly  deprived  of  its  coal. 

If  we  loot;  at  maps  on  which  the  coalfields  are  indicated 
we  find  invariably  that  the  greatest  centres  of  population 
occur  on  and  around  the  great  coalfields.  Population 
is  densest  in  the  United  Kingdom,  in  Belgium,  in  Germany, 
in  France,  in  Russia,  in  Poland,  in  the  United  States, 
etc.,  on,  and  close  to,  the  great  coalfields.  This  is  only 
natural.  Industries  require  vast  quantities  of  coal. 
For  instance,  three  tons  of  coal  are  required  to  smelt  a 
ton  of  iron.  It  is  therefore  cheaper  to  bring  the  industries 
to  the  coal  than  the  coal  to  the  industries.  It  is  cheaper 
to  carry  iron  ore,  wool,  cotton  and  other  raw  materials 
to  the  coalfields  and  to  manufacture  near  the  pit’s  mouth 
than  to  carry  coal  to  the  iron-mines  for  manufacturing 
iron,  or  to  the  harbour  towns  for  making  woollens,  cotton 
goods,  etc.  Sheffield,  Manchester,  Glasgow,  Pittsburg, 
Essen,  etc.,  owe  their  rise  to  the  vicinity  of  the  coalfields. 
If  Germany  should  be  allowed  to  retain  her  conquests 
she  would  not  only  subject  to  herself  millions  of  non- 
Germans,  but  she  would  absolutely  dominate  Europe 
with  the  coal  and  iron  monopoly  which  the  War  would 
have  given  her,  and  she  would  thus  be  able  to  embark 
upon  the  final  conquest  of  the  world.  Moreover,  her 
vast  mineral  resources  would  allow  her  to  double  and 
treble  her  population,  while  France,  deprived  of  the 
bulk  of  her  mineral  resources,  would  decline  in  wealth, 
power  and  population.  She  would  cease  to  count  as  an 
industrial  country,  while  Germany  would  become  far  more 
densely  peopled  than  the  United  Kingdom  and  Belgium. 


FRANCE’S  POSITION  AND  FUTURE 


269 


The  progress  of  population  depends  on  the  progress 
of  the  labour-employing  industries,  and  the  progress  of 
these  depends  chiefly  on  the  possession  of  the  indispen¬ 
sable  raw  materials.  However,  there  is  another  impor¬ 
tant  factor  which  influences  the  birth-rate.  A  victorious 
war  is  apt  to  promote  industrial  development  and  to 
increase  population,  while  a  disastrous  war  is  apt  to 
influence  both  industry  and  population  most  unfavourably. 
After  1871  population  in  Germany  increased  far  more 
quickly  than  it  had  done  previously,  but  France’s  popu¬ 
lation  increased  far  more  slowly.  Obviously  the  war 
stimulated  the  increase  in  population  of  one  country  and 
restricted  it  in  the  other.  Germany’s  industries  expanded 
rapidly  owing  to  the  confidence  which  the  victory  had 
inspired,  owing  to  the  acquisition  of  Alsace-Lorraine, 
and  owing  to  the  receipt  of  the  French  war  indemnity 
of  £200,000,000.  The  war  had  cost  Germany  only 
£50,000,000.  She  had  realised  a  vast  territorial  and 
financial  profit  and  had  invested  it  in  the  business. 
France,  on  the  other  hand,  had  been  greatly  impover¬ 
ished  by  the  war.  Her  losses  may  be  estimated  at  at 
least  £1,000,000,000,  a  colossal  sum  at  the  time.  More¬ 
over,  France’s  taxation  was  enormously  increased  by  the 
war,  which  had  scarcely  affected  taxation  in  Germany. 
Germany  deprived  France  in  1871  not  merely  of  two 
provinces  with  1,500,000  people  and  vast  mineral  resources, 
but  of  millions  of  prospective  citizens  who  would  have 
been  born  of  French  parents  had  not  the  hard  times 
following  the  war  compelled  them  to  restrict  the  birth¬ 
rate.  The  limitation  of  families  became  so  serious  in 
France  after  1871  owing  to  her  defeat  as  well  as  owing  to 
the  insufficiency  of  her  coal. 

The  future  of  France  evidently  depends  on  the  result 
of  the  War.  If  Germany  should  be  able  to  retain  the 
vast  coal  and  iron  resources  of  North-Eastern  France, 


270  FRANCE’S  POSITION  AND  FUTURE 


Belgium,  Luxemburg  and  Alsace-Lorraine,  her  popula¬ 
tion  would  grow  at  an  unprecedented  rate,  while  that  of 
France  would  not  merely  remain  stationary,  but  would 
rapidly  decline.  Lack  of  natural  resources  is  bound  to 
tell.  In  a  few  decades  France  would,  indeed,  cease  to 
be  a  Great  Power,  she  would  become  a  minor  State  at 
the  mercy  of  Germany,  a  German  dependency. 

It  is  in  the  interests  of  Europe  and  of  the  world  that 
France  should  remain  great,  strong  and  prosperous; 
that  her  population  should  again  increase  so  as  to  enable 
her  to  hold  her  own  against  Germany.  France  can  be 
aggrandised  only  if  her  territories  are  increased,  and  if 
she  possesses  or  controls  those  resources  by  the  exploita¬ 
tion  of  which  men  live,  thrive  and  multiply.  The  Allies 
have  announced  that,  in  re-drawing  the  map  of  Europe, 
they  will  be  guided  by  the  principle  of  nationalities,  by 
the  right  of  the  people  to  govern  themselves.  The  facts 
given  in  these  pages  show  that,  although  the  racial 
factor  is  very  important,  the  economic  factor  is  no  less 
weighty.  Policy,  though  striving  after  the  ideal,  should 
not  overlook  and  neglect  the  practical,  the  necessary 
and  the  obvious.  It  is  clear  that  nations  cannot  hope 
to  survive  if  their  opponents  possess  vastly  superior 
natural  resources  which  secure  to  them  an  overwhelm¬ 
ing  and  a  constantly  growing  preponderance  in  man¬ 
power  and  in  industrial  power,  in  soldiers  and  in  arms, 
in  power  and  in  wealth.  Not  only  the  political  frontiers 
of  the  world,  but  the  economic  frontiers  too,  may  have 
to  be  rectified  if  the  future  peace  is  to  be  a  lasting  one. 
The  peace  of  the  world  and  the  future  of  human  civilisa¬ 
tion  are  dependent  on  France’s  future  greatness  and  upon 
her  increased  power  and  prosperity.  The  population 
of  France  can  be  increased  only  if  the  country  acquires, 
in  consequence  of  the  War,  adequate  natural  resources, 
the  exploitation  of  which  allows  men  to  thrive  and  to 


FRANCE’S  POSITION  AND  FUTURE 


271 


multiply.  A  France  with  a  stationary  or  a  retrogressive 
population  is  bound  to  become  Germany’s  vassal  within 
a  few  decades.  Germany  might  more  easily  defeat  France 
in  peace  than  in  war.  France  can  remain  great  and  strong 
only  if  she  obtains  those  material  securities  which  she 
urgently  requires 


CHAPTER  XI 

THE  PROBLEM  OF  ALSACE-LORRAINE  * 

At  present  Germany  absolutely  dominates  the  Continent 
of  Europe  owing  to  her  vast  preponderance  in  population, 
in  natural  resources  of  every  kind,  especially  minerals, 
and  in  the  manufacturing  industries,  and  therefore  in 
soldiers,  arms,  munitions  of  war  and  wealth.  France 
is  the  second  strongest  Power  on  the  Continent,  but  she 
is  greatly  inferior  to  Germany  in  population,  minerals 
and  the  manufacturing  industries,  and  therefore  in  armed 
strength  and  wealth  as  well.  It  is  obviously  in  the 
interest  of  Europe  and  of  the  world  that  France  should  be 
so  strong  as  to  be  able  to  act  as  an  efficient  counterpoise 
to  Germany;  that  she  should  be  so  strong  as  to  be  able 
to  prevent  that  country  embarking  once  more  upon  a 
great  war  of  conquest.  It  follows  that  at  the  Peace  an 
attempt  should  be  made  to  redress  the  balance,  to 
strengthen  France  to  such  an  extent  that  she  will  be 
able  to  resist  a  German  attack  with  hope  of  success. 

France  is  at  present  too  weak  in  men,  material,  resources 
and  wealth,  if  compared  with  Germany.  She  requires 
strengthening,  and  she  can  be  strengthened  most  easily 
either  by  joining  to  her  in  some  form  or  other  populous 
territories  near  her  frontier  or  by  placing  at  her  disposal 
an  adequacy  of  those  natural  resources,  especially  coal, 
which  she  lacks,  and  by  the  exploitation  of  which  men 
multiply  and  nations  acquire  increased  power,  or  by 

*  From  tlie  Fortnightly  Review,  March,  1918. 

272 


THE  PROBLEM  OF  ALSACE-LORRAINE  273 


carrying  out  both  these  measures  at  the  same  time. 
The  defensive  strength  of  France  could  obviously  most 
easily  be  increased  by  the  return  of  Alsace-Lorraine, 
which  was  torn  from  her  side  in  1871.  In  addition, 
France  and  Belgium  might  conclude  a  strict  alliance  for 
mutual  defence. 

Before  the  War  Germany  had  67,000,000  inhabitants, 
France,  had  40,000,000  inhabitants,  Belgium  had  a 
population  of  8,000,000,  and  Alsace-Lorraine  a  population 
of  2,000,000.  If  Germany  should  lose  only  Alsace- 
Lorraine  to  France,  her  population  would  be  reduced 
from  67,000,000  to  65,000,000,  and  that  of  France  would 
be  increased  from  40,000,000  to  42,000,000,  while  France 
and  Belgium  combined  would  have  a  population  of 
50,000,000.  Germany  would  still  continue  to  be  vastly 
superior  to  France  in  men,  and  particularly  in  mineral 
and  industrial  resources.  The  abundance  of  Germany’s 
natural  wealth,  and  especially  her  vast  riches  in  coal, 
would  enable  the  German  population  to  increase  at  a 
very  rapid  rate,  while  the  lack  of  natural  resources, 
particularly  of  coal,  would  cause  France’s  population  to 
remain  stationary.  Before  long  Germauy’s  prepon¬ 
derance  over  France  in  man-power,  industrial  power, 
wealth  and  armed  strength  would  be  absolutely  over¬ 
whelming.  It  follows  that  the  retrocession  of  Alsace- 
Lorraine  and  a  Franco-Belgian  alliance  would  not  suffice 
to  re-establish  the  balance  between  France  and  Germany 
At  best  it  would  prove  a  very  ineffective  half-measure. 

The  Allied  statesmen  have  formally  and  solemnly 
recognised  France’s  title  to  Alsace-Lorraine.  On  the 
other  hand,  the  Germans  and  their  friends  have  informed 
us  that  Alsace-Lorraine  was  originally  part  of  Germany; 
that  it  was  unjustly  torn  from  Germany  in  the  time  of 
Louis  XIV.;  that  the  vast  majority  of  the  inhabitants 
of  the  country  are  Germans  by  race  and  by  language; 


274  THE  PROBLEM  OF  ALSACE-LORRAINE 

that  they  are  happy  and  prosperous;  that  they  have 
no  wish  to  become  once  more  subjects  of  France;  that  a 
plebiscite  would  establish  the  fact  that  they  desire  to 
remain  Germans.  Let  us  consider  the  arguments  in 
favour  of  Germany  retaining  Alsace-Lorraine  by  means 
of  the  official  German  statistics,  to  which  not  even  the 
most  patriotic  German  can  take  exception.  The  figures 
used  in  this  article  have  been  taken  from  the  Statistisches 
Jahrbuch  fur  Elsass-Lothr ingen.  The  issue  of  1913  has 
been  used,  and  the  pages  have  been  indicated  in  every 
case  so  as  to  facilitate  reference  and  control  of  the  state¬ 
ments  made. 

Alsace-Lorraine  was  not  “  torn  from  Germany  in  the 
time  of  Louis  XIV  .,”  as  is  frequently  stated,  but  was 
willingly  ceded  by  Germany  to  France  in  1648  at  the 
Peace  of  Westphalia,  which  ended  the  Thirty  Years’ 
War.  The  fact  that  Germany  attached  little  value  to 
the  possession  of  Alsace-Lorraine  at  the  time,  and  that 
that  country  was  ceded  willingly,  if  not  gladly,  may  be 
seen  from  the  sixth  edition  of  Meyer’s  Konversations 
Lexikon,  the  leading  German  encyclopaedia.  We  read 
under  the  heading  “  Elsass-Lothringen  ”  in  vol.  v.,  p.  733 : 

How  little  the  Imperial  House  of  Habsburg  was  willing 
to  preserve  the  frontier-land  for  Germany  was  shown 
by  the  treaty  of  March  20th,  1617,  by  which  it  ceded 
to  Spain  its  rights  to  Alsace.  In  the  course  of  the  Thirty 
Years’  War  (which  began  in  1618)  Duke  Bernhardt  of 
Weimar  tried  to  found  a  principality  for  himself  in  Alsace. 
However,  he  tried  to  do  this  with  the  help  of  French 
support  and  of  French  money.  When  he  died,  in  1639, 
Alsace  fell  into  the  hands  of  the  French,  and  at  the  Peace 
of  Wbstphalia  of  1648  the  Emperor  ceded  to  France  all 
his  rights  to  Alsace.  Thus  France  took  the  place  of 
Spain.  It  is  true  the  rights  of  the  Imperial  Estates 
were  recognised  in  particular  because  the  Emperor  had 
waived  his  rights  in  his  capacity  as  Overlord  of  the 
Empire,  not  on  behalf  of  the  Empire. 


THE  PROBLEM  OF  ALSACE-LORRAINE  275 


The  stipulations  whereby  this  transference  of  territory 
and  of  rights  was  made  were  vaguely  worded  for  the 
purpose  of  sparing  Germany’s  susceptibilities  and  of 
facilitating  the  conclusion  of  the  peace.  That  is  acknow¬ 
ledged  by  most  impartial  historians.  Louis  XIV.  did 
not  rob  Germany  of  Alsace-Lorraine,  but  made  use  in 
his  own  time  of  the  stipulations  of  the  Treaty  of  West¬ 
phalia  by  abolishing  the  purely  nominal  independence 
which  had  been  left  to  the  Alsatian  Statelets.  The 
inhabitants  of  the  two  provinces  were  happy  to  become 
Frenchmen,  and  they  became  most  loyal  and  devoted 
subjects  of  France,  because  that  country  pursued  a  wise 
policy  of  justice  and  of  generous  toleration  towards 
them,  which  contrasts  most  favourably  with  the  rule  of 
petty  persecution  and  oppression  which  Germany  initiated 
in  1870.  Ever  since  the  people  of  Alsace-Lorraine  have 
fought  enthusiastically  and  determined^  for  France. 
On  the  Arc  de  Triomphe  in  Paris,  on  which  the  names 
of  those  Generals  were  inscribed  who  distinguished 
themselves  in  fighting  for  revolutionary  and  Napoleonic 
France,  the  following  twenty -eight  names  of  Alsatian 
Generals  are  engraved : 

Scherer  (the  Minister  of  War),  Wehrle,  Beurmann, 
Wolf,  Castex,  Kellermann  (who,  at  Valmy,  defeated 
the  Prussians,  saved  France,  and  became  Due  de  Valmy 
and  Marshal  of  France),  Strolz,  Kleber  (who  succeeded 
Napoleon  as  Commander  in  Egypt),  Schauenbourg, 
Becker,  Stengel,  Amey,  Kellermann  Filsv  Lefebvre 
(Due  de  Dantzig  and  Marshal  of  France),  Hatry,  Boyer, 
Dorsner,  Schramm,  Schneider,  De  Berckheim,  Chouard, 
Schaal,  Bourcier,  Rapp  (Napoleon’s  Aide-de-Camp), 
Walther,  Schramm  Fils,  De  Coehorn,  Dahlmann. 

In  addition,  thirty-four  other  Alsatian  Generals  served 
under  Napoleon.  In  this  War  also  numerous  distin¬ 
guished  Alsatian  officers  have  been  fighting  on  the  side 
of  France,  but  scarcely  any  on  that  of  Germany. 


276  THE  PROBLEM  OF  ALSACE-LORRAINE 

The  present  War  is  largely  fought  in  defence  of  the 
principle  of  nationalities,  in  defence  of  the  principle  that 
nations  are  entitled  to  be  free,  that  they  have  the  right 
to  dispose  of  themselves  and  to  govern  themselves. 
Therefore,  we  need  not  attach  over -great  importance 
to  the  learned  arguments  advanced  by  professors  of 
history,  who  dispute  the  provisions  of  the  Treaty  of 
Westphalia,  or  to  the  learned,  but  very  contradictory, 
opinions  of  ethnologists,  archaeologists,  philologists  and 
anthropologists  who  establish  racial  and  national  claims 
by  measuring  skulls,  dissecting  language  roots,  etc. 
Men  choose  their  allegiance,  not  for  anthropological, 
philological,  or  historical  reasons,  but  for  more  human 
and  more  commonplace  motives.  As  a  rule,  they  are 
willing  to  live  under  a  Government  which  treats  them 
justly  and  fairly,  but  they  are  unwilling  to  submit  to 
harshness,  exploitation  and  gross  and  palpable  injustice. 
Men  of  the  same  race  consider  themselves,  to  some  extent, 
as  brothers.  Hence,  governmental  injustice  becomes 
particularly  irksome,  exasperating  and  unbearable  if 
it  is  exercised  by  men  of  a  different  race. 

At  first  sight  the  contention  that  the  inhabitants  of 
Alsace-Lorraine  are  men  of  German  race  and  that  they 
are  satisfied  would  seem  to  be  perfectly  correct.  The 
Statistical  Year-Book  for  Alsace-Lorraine  provides  us, 
on  p.  22,  with  the  following  language  statistics: 


Mother-Tongue  of  Inhabitants  of  Alsace-Lorraine. 


In  1900. 

In  1910. 

Inhabitants  of  German  language 

. .  1,492,323 

1,634,260 

,,  ,,  French  language 

199,433 

204,262 

„  ,,  various  languages 

27,714 

36,492 

Total 

. .  1,719,470 

1,874,014 

In  1910,  at  the  time  of  the  Census,  only  204,262  of  the 
inhabitants  of  Alsace-Lorraine,  or  less  than  one-ninth, 


THE  PROBLEM  OF  ALSACE-LORRAINE  277 


had  the  French  mother-tongue,  and  only  99,612  people, 
or  one -nineteenth  of  the  inhabitants,  spoke  French  and 
did  not  know  German.  The  great  majority  of  the  Alsa¬ 
tians  and  Lorrainers  are  of  German  descent  and  language. 
That  is  shown  not  only  by  the  statistics  quoted,  but  by 
the  general  prevalence  of  German  personal  names  as 
well.  The  list  of  Alsatian  officers  inscribed  on  the  Arc 
de  Triomphe,  previously  given,  contains  scarcely  any 
except  German  names. 

The  satisfaction  or  dissatisfaction  of  conquered  people 
can  usually  be  measured  with  mathematical  certainty 
by  their  movements.  Satisfied  annexed  populations 
increase,  but  dissatisfied  ones  diminish  through  the  decline 
of  the  birth-rate,  and  especially  through  emigration. 
Since  its  incorporation  in  Germany  the  population  of 
Alsace-Lorraine  has,  according  to  the  Alsatian  Statistical 
Abstract,  p.  1,  changed  as  follows: 


Year. 

Year. 

1871  .. 

. .  1,549,738 

1895  . . 

. .  1,640,986 

1875  .. 

. .  1,531,804 

1900  . . 

..  1,719,470 

1880  . . 

. .  1,566,670 

1905  . . 

. .  1,814,564 

1885  .  . 

1890  . . 

.  .  1,564,355 

. .  1,603,506 

1910  .. 

. .  1,874,014 

The  population  of  Alsace-Lorraine  has  considerably 
increased  between  1871  and  1910.  It  has  grown  during 
that  period  by  324,276,  or  by  little  more  than  20  per 
cent.,  while  during  the  same  period  the  population  of 
France  has  increased  only  from  36,190,000  to  39,528,000, 
or  by  a  little  less  than  10  per  cent.  Only  during  two 
Census  periods  the  population  of  the  two  provinces 
decreased.  The  substantial  increase  of  the  Alsatian 
population  and  its  small  diminution  during  only  two 
Census  periods  would  seem  to  indicate  that  the  conquered 
peoples  are  indeed  as  satisfied  with  their  new  masters 
as  the  Germans  contend.  However,  if  we  turn  to  the 

19 


278  THE  PROBLEM  OF  ALSACE-LORRAINE 


German  compiled  and  German  published  official  statis¬ 
tical  abstract  of  Alsace-Lorraine  and  analyse  the  figures 
contained  in  it,  we  shall  see  a  picture  which  differs  very 
widely  from  that  which  is  provided  by  the  Censuses. 
In  1871  Alsace-Lorraine  had  1,549,738  inhabitants. 
If  there  had  been  no  emigration  from  that  country  it 
should  have  had  in  1910,  not  1,874,014  inhabitants 
but  2,476,544  inhabitants,  owing  to  the  yearly  excess 
of  births  over  deaths,  and  owing  to  immigration  from 
Germany  and  other  countries.  This  is  borne  out  by  the 
following  figures: 

Population  of  Alsace-Lorraine  in  1871  (page  1)  . .  1,549,738 
♦Excess  ol  births  over  deaths,  1872-1911  (page  29)  554,984 

Germans  and  foreigners  at  Census  of  1910  (page  17)  371,822 

Total  .  .  . .  2,476,544 

As  the  population  of  the  provinces  was  in  1910  only 
1,874,014,  it  appears  that  no  fewer  than  602,530  people 
have  been  lost  to  Alsace-Lorraine  by  emigration  beween 
1871  and  1910.  That  is  exactly  40  per  cent,  of  the 
original  number  of  inhabitants.  Emigration  from 
Alsace-Lorraine  has  been  caused,  not  by  economic  pres¬ 
sure,  but  by  political  dissatisfaction,  and  it  has  been 
on  an  unprecedented  scale.  It  beats  ah  established 
records.  Very  likely  this  gigantic  figure  of  emigration 
seriously  understates  the  actual  fact,  for  many  of  the 
children  of  immigrant  Germans  and  foreigners  who  were 
born  in  Alsace-Lorraine — they  should  number  at  least 
100,000  —  are,  of  course,  described  in  the  Census  as 
native  Alsatians  and  Lorrainers.  It  follows  that,  prob¬ 
ably,  at  least  700,000  have  left  their  homes. 

The  revelations  of  the  statistical  abstract  are  so  startling 
that  it  seems  necessary  to  test  the  correctness  of  the 

*  As  the  figures  for  1871  are  not  available,  those  for  1911  have 
been  used  instead. 


THE  PROBLEM  OF  ALSACE-LORRAINE  279 


foregoing  figures  by  calculating  the  loss  caused  by  emi¬ 
gration  in  a  different  way.  Page  48  of  the  Year-Book 
contains  a  table  which  gives  the  loss  or  gain  which  the 
civil  population  of  Alsace-Lorraine  has  experienced  during 
every  one  of  the  Census  periods.  It  supplies  us  with  the 
following  extraordinary  picture: 


Net  Gain  or  Loss  Through  Migration. 


Year. 

Male. 

Female. 

Total. 

1871-1875  .. 

-44,490 

-26,471 

-70,970 

1875-1880  .. 

-15,230 

-20,605 

-35,835 

1880-1885  .. 

-31,792 

-27,520 

-59,312 

1885-1890  .. 

-18,915 

- 19,076 

-37,991 

1890-1895  . . 

-18,125 

- 16,409 

-  34,534 

1895-1900  .. 

+  5,677 

-  8,333 

-  2,656 

1900-1905  . . 

+  6,767 

-  2,813 

+  3,954 

1905-1910  .. 

-  16,544 

-13,751 

-  30,295 

Total 

-132,661 

- 134,978 

-267,639 

The  tremendous  and  unceasing  outflow  of  population 
which  has  occurred  during  all  Census  periods  except  a 
single  one  is  particularly  striking  if  we  remember  that 
there  has  been  an  enormous  immigration  into  Alsace- 
Lorraine  both  from  Germany  and  other  countries,  and 
that  the  present  table  gives  only  the  excess  of  emigration 
over  immigration,  but  by  no  means  the  total  emigration. 

It  is  usually  believed  that  only  young  men  have  left 
Alsace-Lorraine  in  order  to  escape  compulsory  service 
in  the  German  Army.  The  official  statistics  show  that  the 
number  of  women  who,  on  balance,  have  emigrated  from 
that  country  has  been  even  greater  than  that  of  the  men. 
The  figures  given  show  that,  on  balance,  Alsace-Lorraine 
has  lost  between  1870  and  1910,  267,639  people  by  emi¬ 
gration.  However,  if  we  wish  to  find  out  how  many 
Alsacc-Lorrainers  have  actually  left  their  country  we  must, 


280  THE  PROBLEM  OF  ALSACE-LORRAINE 


of  course,  add  to  the  figures  given  the  Germans  and 
foreigners  who  were  enumerated  in  those  provinces  at 
the  Census  of  1910.  Such  a  calculation  yields  the  follow¬ 
ing  result: 

Excess  of  emigration  of  civil  population  over  im¬ 
migration,  1879-1910  (page  48)  . .  . .  . .  267,639 

Germans  and  foreigners  in  Alsace-Lorraine  in  1910 

(page  17)  . .  . .  . .  . .  . .  . .  371,882 

Total  . .  . .  . .  639,521 

This  calculation  and  the  previous  one  yield  very  similar 
results.  The  difference  of  36,991  between  the  two  is 
no  doubt  due  to  errors  of  detail  which  are  inseparable 
from  population  statistics.  If  we  add  to  this  figure  the 
children  of  immigrant  Germans  and  foreigners,  probably 
at  least  100,000,  who  are  officially  described  as  Native 
Alsatians,  we  arrive  at  the  full  loss  of  population  which 
the  two  provinces  have  suffered  since  1871.  French 
authorities  habitually  state  that  Alsace-Lorraine  has 
lost  through  emigration  500,000  inhabitants.  The  figure 
usually  given  is  not  very  convincing  on  account  of  its 
roundness.  From  the  official  German  statistics  it  appears 
that,  not  allowing  for  the  children  of  immigrant  Germans 
and  of  foreigners  who  are  described  as  Native  Alsatians 
and  Lorrainers,  the  two  provinces  have  lost  by  emigration 
either  602,530  or  639,521  people,  of  whom  about  one 
half  were  women.  That  is  the  most  damning  evidence 
as  to  the  effect  of  Germany’s  rule. 

It  will  be  noticed  that  I  assume  that  all  the  Germans 
and  foreigners  dwelling  in  Alsace-Lorraine  have  migrated 
into  the  country  since  its  annexation.  During  the  turmoil 
of  war  there  were  probably  few  Germans  and  other 
foreigners  in  the  country.  Besides,  against  the  number 
of  Germans  and  foreigners  who  were  in  Alsace-Lorraine 
in  1871  may  be  set  part  of  the  children  of  Germans  and 


THE  PROBLEM  OF  ALSACE-LORRAINE  281 


foreigners  born  in  Alsace-Lorraine  who  are  now  classed 
as  Alsatians  and  Lorrainers. 

In  1910  there  were  in  Alsace-Lorraine  371,822  Germans 
and  foreigners.  Of  these,  295,436  were  Germans  and 
76,386  were  foreigners.  Let  us  now  consider  the  com¬ 
position  of  this  immigrant  population. 

The  295,436  Germans  can  be  classified  as  follower 


Male  civilians  . .  108,444 

Females  ..  ..  111,494 

Soldiers  from  Ger¬ 
many  . .  . .  75,498 


Total  . .  295,436 


Citizens  of  Prussia  174,468 

,,  ,,  Bavaria  42,013 

,,  ,,  Baden  . .  39,495 

,,  ,,  the  other 

States  39,460 


Total  . .  295,436 


It  will  be  noticed  that  the  Prussian  element  is  by  far 
the  strongest  in  Alsace-Lorraine.  We  can  therefore 
not  wonder  that  the  country  is  not  being  Germanised, 
but  Prussianised. 

Let  us  now  inquire  into  the  occupations  of  the  Alsatian 
natives  and  the  immigrant  population.  According  to 
data  furnished  by  the  German  Census  of  Production  of 
1907,  which  may  be  found  on  page  25  of  the  Alsatian 
Statistical  Year-Book,  the  people  gainfully  occupied 
in  Alsace-Lorraine  were  classed  as  follows : 


Born  Alsatians. 

Germans  and 
Foreigners. 

In  agriculture 

327,482 

.  11,684 

In  industry 

270,814 

79,495 

In  commerce  and  trade 

73,111 

24,433| 

In  domestic  service  . . 

7,630 

2,653 

In  the  army  . . 

In  the  Civil  Service  and  the 

6,291 

68,257 

professions  . . 

22,905 

11,930 

The  vast  majority  of  the  immigrant  Germans  and 
foreigners  are  engaged  in  the  most  profitable  occupations 


282  THE  PROBLEM  OF  ALSACE-LORRAINE 

in  industry  and  commerce.  The  proportion  of  immi¬ 
grants  to  natives  is  particularly  great  in  the  Civil  Service 
and  in  the  learned  professions,  which  are  almost  monopo¬ 
lised  by  Germans.  On  the  other  hand,  the  proportion 
of  immigrants  is  quite  insignificant  in  agriculture,  which 
has  been  allowed  to  remain  a  native  monopoly.  While 
Germans,  and  particularly  Prussians,  have  occupied  all 
the  best  administrative  positions  and  have  crowded  into 
all  the  well-paid  occupations,  the  natives  have  become 
hewers  of  wood  and  drawers  of  water.  The  hundreds 
of  thousands  of  Alsatians  who  have  left  their  country 
since  1871  have  been  replaced  by  Germans  from  Germany 
and  by  foreigners,  especially  by  Italians  and  Poles.  In 
this  way  the  country  has  to  some  extent  been  denationa¬ 
lised.  However,  it  should  not  be  thought  that  the 
600,000  inhabitants  of  Alsace-Lorraine  who  have  emi¬ 
grated  have  abandoned  their  native  soil  impelled  by 
the  spirit  of  adventure — that  they  have  gone  to  oversea 
countries.  Between  1902  and  1911,  for  which  years 
alone  there  are  official  figures  on  page  49  of  the  Statistical 
Abstract,  oversea  emigration  from  the  conquered  pro¬ 
vinces  came  only  to  about  500  per  year.  The  vast 
majority  of  the  emigrants  have  left  Alsace-Lorraine  for 
France.  They  have  thus  shown  where  their  sympathies 
lie. 

A  certain  number  of  Alsatians  have  gone  to  Germany. 
In  1907,  at  the  time  of  the  Industrial  Census  (see  page 
26  of  the  Year-Book),  71,248  people  born  in  the  two 
provinces  dwelt  in  Germany.  Of  these,  11,884  were 
soldiers,  officials,  etc.  Of  the  remaining  59,364,  the 
great  majority  were  agricultural  and  industrial  labourers 
and  their  families.  In  this  connection  it  should  be 
mentioned  that  the  German  Government  distrusts 
Alsace-Lorraine  to  such  an  extent  that  the  tw'o  provinces 
are  garrisoned  almost  exclusively  by  German  troops, 


THE  PROBLEM  OF  ALSACE-LORRAINE  283 


while  the  majority  of  the  Alsatian  recruits  are  distributed 
all  over  Germany.  In  1910  the  garrison  of  Alsace- 
Lorraine  was  composed  of  75,498  Germans  and  only 
6,778  natives  of  the  country. 

According  to  the  Census  of  Production,  the  vast 
majority  of  the  immigrant  Germans  and  foreigners  have, 
as  has  previously  been  shown,  gone  into  trade,  industry, 
the  Civil  Service,  the  learned  professions,  etc.  The 
new-comers  have  filled  the  towns,  and  have  abandoned 
the  countryside  to  the  original  inhabitants.  The  follow¬ 
ing  table,  compiled  from  page  296  of  the  official  Year- 
Book,  shows  the  composition  of  the  population  of  some 
representative  towns : 


Alsace- 

Lorrainers. 

Germans. 

Foreigners. 

Strassburg  . . 

113,471 

60,774 

4,646 

Mulhouse 

72,584 

16,808 

5,649 

Metz  . . 

29,136 

35,762 

3,700 

Colmar 

34,480 

8,219 

1,109 

Algringen 

1,556 

6,644 

1,276 

Deutschoth  .  . 

1,386 

1,510 

3,397 

Diedenhofen 

6,038 

6,799 

1,347 

Dieuze 

2,450 

3,273 

129 

Grossmoyeuvre 

3,478 

3,146 

2,931  i 

Hayingen 

5,064 

3,172 

3,246 

Kleinrosseln 

2,458 

1,329 

1,825 

Morcbingen  .  . 

1,632 

5,247 

87 

Montigny 

5,152 

8,288 

577 

Nilvingen 

2,383 

1,842 

1,570 

Sablon 

4,656 

5,477 

587 

St.  Avoid 

2,399 

f 

3,884 

117 

It  will  be  observed  that  the  number  of  Germans  and 
of  foreigners  is  greatest  in  the  large  towns,  and  that  the 
proportion  of  Germans  and  foreigners  is  heaviest  in  those 
numerous  small  manufacturing  and  mining  towns  which 
have  recently  sprung  up.  In  Metz,  with  its  large  garrison, 
there  are  more  Germans  than  natives.  In  the  iron  and 


284  THE  PROBLEM  OF  ALSACE-LORRAINE 


coal  centres,  such  as  Algringen,  Diedenhofen,  Morchingen, 
Montigny  and  others,  there  are  also  more  Germans  than 
natives.  In  some  of  these  towns  there  are  three  or  four 
Germans  to  every  single  native.  In  others  the  foreigners 
are  as  numerous  as  the  natives.  In  Deutschoth  there 
were  three  times  as  many  foreigners  as  Alsace -Lorrainers. 
On  many  points  the  natives  of  Alsace-Lorraine  are  thus 
being  crow’ded  out. 

The  Germans  pride  themselves  on  having  awakened 
and  developed  the  sleepy  towns  of  Alsace-Lorraine. 
Some,  especially  the  commercial  and  industrial  districts, 
have  indeed  grown  rapidly  in  population  since  1871,  but 
others  have  declined,  as  the  following  table  (page  292  of 
the  official  Abstract)  shows: 


Strassburg 

Metz 

Mulhouse 

District  of  Molsbeim  . . 

,,  ,,  Schlettstadt 

,,  ,,  Weissenburg 

,,  ,,  Rappoltsweiler 

,,  ,,  Chateau- Salins 

Commune  of  Algringen 
,,  ,,  Nilvingen 

,,  ,,  Sablon  . . 

,,  ,,  Deutschoth 

,,  ,,  Kneuttingen 


1871. 

1910. 

85,654 

178,891 

53,623 

68,598 

52,892 

95,041 

74,910 

67,069 

78,162 

67,581 

62,333 

56,579 

67,102 

58,151 

52,801 

45,303 

367 

9,476 

273 

5,795 

1,039 

10,720 

1,050 

6,293 

937 

5,612 

While  between  1871  and  1910  the  population  of  Strass¬ 
burg,  Metz,  Mulhouse,  and  of  the  mining  towns  at  the 
bottom  of  the  table,  has  increased  considerably,  that  of 
the  districts  of  Molsheim,  Schlettstadt,  etc.,  has  sub¬ 
stantially  decreased. 

The  towns  of  Alsace-Lorraine  have  prospered  during 
the  German  occupation,  but  it  is  a  serious  error  to  believe 


THE  PROBLEM  OF  ALSACE-LORRAINE  285 


that  they  had  been  stagnant  before  1871.  That  may 
be  seen  from  the  following  figures,  which  are  taken  from 
page  292  of  the  official  Year-Book : 


Population  of — 


Year. 

Strass¬ 

burg. 

Mul¬ 

house. 

Metz. 

Colmar. 

Geb¬ 

weiler. 

Hage- 

nau. 

Mar- 

hirch. 

1800 

1871 

1910 

■ 

48,470 

85,654 

178,891 

6,628 

52,892 

95,041 

34,401 

53,623 

68,598 

13,396 

23,311 

43,808 

2,802 

11,350 

13,024 

7,009 

11,388 

18,868 

6,364 

12,322 

11,778 

• 

Under  the  French  Government  the  whole  country,  and 
particularly  the  textile  centres,  such  as  Mulhouse  and 
Gebweiler,  were  developed.  Under  Germany’s  domina¬ 
tion  the  textile  industries,  deprived  of  the  French  market, 
began  to  languish.  On  the  other  hand,  of  recent  years 
the  iron  and  steel  industries  have  mightily  developed, 
because  two  Englishmen,  Sidney  G.  Thomas  and  Percy 
C.  Gilchrist,  discovered  in  1878  a  way  of  treating  the 
vast  deposits  of  phosphoric  iron  ores  of  Alsace-Lorraine. 
Hence  we  find  that  the  population  of  certain  communes, 
such  as  Algringen,  Nilvingen,  etc.,  has  grown  tenfold, 
twenty  fold  and  more. 

The  Germans  have  endeavoured  to  Germanise  Alsace- 
Lorraine  by  means  of  the  schools.  Compulsory  educa¬ 
tion  has  been  rigidly  enforced.  In  accordance  with 
traditional  Prussian  policy,  the  new  rulers  of  Alsace- 
Lorraine  have  vastly  improved  the  intermediate  and 
University  education  as  well.  They  have  opened  libraries, 
museums  and  other  learned  institutions,  and,  having 
deliberately  destroyed  the  celebrated  Strassburg  Library, 
with  its  irreplaceable  manuscripts  and  other  treasures, 
by  bombardment,  have  created  a  huge  new  library  in 
its  stead.  The  progress  of  University  and  intermediate 


286  THE  PROBLEM  OF  ALSACE-LORRAINE 


education  in  Alsace-Lorraine  under  German  rule  may  be 
seen  from  the  following  figures,  which  have  been  extracted 
from  the  official  Year-Book,  pages  228  to  235: 


Strassburg  University. 

Year. 

Volumes 

Intermediate 

Alsatian 

Other 

Teachers. 

in 

Library. 

School 

Attendance. 

Students. 

Students. 

1872  .. 

69 

143 

47 

220,000 

2,403 

1882  .. 

200 

588 

104 

542,865 

7,096 

1892  .. 

410 

559 

121 

715,215 

8,668 

1902  .. 

619 

514 

144 

878,933 

9,394 

1912  .. 

1,142 

996 

178 

1,002,550 

12,235 

The  intermediate  schools  and  the  Universities  have 
been  managed  with  the  greatest  efficiency.  The  German 
Government  has  sent  to  Strassburg  some  of  its  ablest 
scientists,  teachers  and  administrators,  and  the  result 
has  been  a  steady  and  exceedingly  rapid  progress  in  the 
attendance  of  students  and  scholars.  The  fact  that  nearly 
half  of  the  students  at  Strassburg  are  non-Alsatians 
testifies  to  the  excellence  of  that  institution.  The 
Government  has  been  lavish  in  giving  grants  in  aid  to 
the  University,  the  library  and  other  institutions,  which 
have  been  palatially  housed. 

Germany  has  not  only  improved  education  in  Alsace- 
Lorraine,  but  all  the  public  services  as  well.  The  railway 
mileage  of  the  two  provinces  has  been  increased  from 
768  kilometres  in  1871  to  1,919  kilometres  in  1910,  at  an 
expenditure  of  Mk. 545, 830, 772.  The  Alsatian  roads 
and  waterways  have  been  vastly  improved,  and  so  have 
been  the  police,  sanitation,  the  administration  of  the 
law,  general  administration,  etc.  Even  those  Alsatians 
Who  are  irreconcilably  hostile  to  Germany  recognise 


THE  PROBLEM  OF  ALSACE-LORRAINE  287 


the  efficiency  of  the  German  Government  and  the  excel¬ 
lence  of  the  work  done.  However,  the  efficiency  and  the 
excellence  of  the  German  institutions  do  not  reconcile 
the  native  population  to  the  high-handed,  over-bearing 
and  unsympathetic  attitude  of  their  new  masters. 

Alsace-Lorraine  has  undoubtedly  prospered  under 
German  rule.  Its  progress  in  wealth  and  population 
is  due  chiefly  to  the  exploitation  of  the  vast  mineral 
resources  in  the  two  provinces,  and  especially  to  the 
utilisation  of  the  phosphoric  iron  ores.  The  development 
and  the  future  possibilities  of  the  mineral  industry  of  the 
two  provinces  may  be  gauged  from  the  following  table 
which  is  taken  from  page  90  of  the  Statistical  Year- 
Book  : 


Production  in  Tons. 


Year. 

Black 

Coal. 

Petro¬ 

leum. 

Iron  Ore. 

Potash. 

Iron. 

1872  . . 

290,206 

4,093 

684,600 

222,070 

1882  .. 

581,525 

2,169 

1,359,141 

_ 

359,117 

1892  . . 

692,510 

12,942 

3,571,426 

— 

733,768 

1902  . . 

1,309,818 

20,205 

8,793,496 

(1910)  64,822 

1,630,220 

1911  .. 

3,033,436 

43,748 

17,754,571 

197,142 

2,908,230 

Between  1872  and  1911  the  production  of  coal  and  of 
petroleum  in  Alsace-Lorraine  has  increased  tenfold  and 
that  of  iron  ore  twenty-five-fold,  while  the  production  of 
manufactured  iron  has  grown  thirteenfold.  Vast  deposits 
of  soluble  potash  of  infinite  value  have  only  lately  been 
discovered.  The  production  of  the  potash-mines  has 
trebled  in  a  single  year. 

Germany  has  by  far  the  largest  iron  industry  in  Europe. 
In  1913  she  produced  twice  as  much  iron  as  the  United 
Kingdom  and  four  times  as  much  as  France.  Germany’s 
prosperity  is  based  on  the  possession  of  an  abundance 


288  THE  PROBLEM  OF  ALSACE-LORRAINE 


of  coal  and  of  iron  ore.  The  bulk  of  the  iron  ore  em¬ 
ployed  in  Germany  comes  from  Alsace-Lorraine.  In 
the  Gemeinfassliche  Darstellung  des  Eisenhuttenweseyis ,  a 
handbook  published  by  the  Association  of  German  Iron 
Producers,  we  read : 

The  opening  of  the  Minette  ore  deposits  in  Luxemburg, 
Lorraine,  and  the  neighbouring  districts  of  France  and 
Belgium  caused  in  these  territories  and  the  districts 
adjoining  them  a  wonderful  advance  of  the  iron  industry. 
The  production  of  iron  ore  in  Lorraine  and  Luxemburg 
has,  within  a  very  short  time,  overtaken  the  iron  ore 
production  of  all  other  districts  of  Germany  combined. 
The  iron  ore  production  of  Lorraine  and  Luxemburg 
amounted  in  1910  nearly  to  80  per  cent,  of  the  whole 
of  the  German  iron  output.  The  future  of  the  German 
iron  ore  industry  depends  on  these  deposits. 

According  to  Kohlmann’s  estimate,  the  iron  ore  in 
German  Lorraine  should  approximately  amount  to 
1,800,000,000  tons.  At  the  present  rate  of  production 
it  should  suffice  for  130  years.  Luxemburg  has  about 
300,000,000  tons. 

The  comparatively  recent  opening  of  new  iron-mines 
about  Nancy  and  Briey  has  become  important  not  only 
for  the  iron  industry  of  Lorraine,  but  also  for  that  of 
Westphalia.  Formerly  the  exports  and  imports  across 
the  Franco-German  frontier  were  about  equal  as  far  as 
iron  ore  is  concerned.  For  some  time  the  import  of  French 
iron  ore  has  more  and  more  exceeded  the  exports  of  Ger¬ 
man  iron  ore  to  France,  and  a  large  part  of  the  French 
iron  ore  goes  to  the  Ruhr  district. 

The  Franco-German  mineral  trade  tends  to  become 
more  and  more  a  trade  in  which  the  French  exchange  their 
iron  ore  against  German  coal,  for  there  is  a  keenly  felt 
lack  of  coal  in  the  French  iron-ore  district  near  the  German 
frontier. 

The  prosperity  of  the  German  and  of  the  French  iron 
industries  depends  on  the  vast  deposits  of  iron  ore  which 
occur  in  the  narrow  district  of  Briey-Diedenhofen,  on 
both  sides  of  the  Franco-German  frontier.  The  opening 


THE  PROBLEM  OF  ALSACE-LORRAINE  289 


of  these  deposits  has  caused  a  rapid  increase  in  the  pro¬ 
duction  of  iron  ore  in  both  countries.  The  progress  in 
the  production  of  iron  ore  among  the  four  principal 
iron-producing  nations  of  the  world  is  depicted  in  the 
following  table: 


Iron  Ore  Production  (Tons). 


Year. 

In 

Germany. 

In  France. 

In  United 
Kingdom. 

In  United 
States. 

1870 

3,839,000 

2,900,000 

14, $01,000 

3,080,000 

1875 

4,730,000 

2,506,000 

16,074,000 

4,080,000 

1880 

7,239,000 

2,874,000 

18,314,000 

7,234,000 

1885 

9,158,000 

2,318,000 

15,665,000 

7,782,000 

1890 

11,406,000 

3,472,000 

14,001,000 

16,293,000 

1895 

12,350,000 

3,680,000 

12,817,000 

16,213,000 

1900 

18,964,000 

5,448,000 

14,282,000 

26,332,000 

1905 

23,444,000 

7,395,000 

14,824,000 

43,207,000 

1910 

28,710,000 

14,500,000 

15,470,000 

57,800,000 

1913 

35,941,000 

21,714,000 

16,254,000 

62,972,000 

In  1870  the  United  Kingdom  produced  considerably 
more  iron  ore  than  Germany,  France  and  the  United 
States  combined.  In  1910  Germany  and  Luxemburg — 
the  two  are  joined  together,  because  Luxemburg  belongs 
to  the  German  Customs  Union — produced  practically 
as  much  iron  ore  as  the  United  Kingdom  and  France 
combined.  Between  1890  and  1900  Germany  produced 
per  year  regularly  from  three  to  four  times  as  much  iron 
ore  as  France ,  but  since  then  France  has  begun  exploiting 
energetically  the  ores  of  the  celebrated  Briey  district, 
and  the  result  has  been  that  French  iron  production  has 
quadrupled  since  1900,  while  German  iron  production 
has  grown  by  only  84  per  cent,  during  the  same  time. 
The  jealousy  of  the  German  iron  and  steel  magnates  of 
the  rapidly  increasing  iron  industries  of  France  has, 
no  doubt,  been  one  of  the  causes  of  the  war.  In  1913 


290  THE  PROBLEM  OF  ALSACE-LORRAINE 


France  produced  considerably  more  iron  ore  than  the 
United  Kingdom. 

While  France’s  production  of  iron  ore  has  quadrupled 
since  1900,  her  production  of  iron  has  increased  at  a  much 
slower  rate,  because  she  lacks  the  coal  required  for  smelt¬ 
ing  it.  The  German  handbook  of  the  iron  trade  previbusly 
mentioned  states: 

The  development  of  the  French  iron  industries  would 
have  been  a  more  favourable  one  if  Eastern  France  did 
not  lack  coal.  At  the  present  moment  (this  was  written 
in  1912)  Germany  furnishes  already  more  than  half  of 
the  coal  used  in  the  French  iron  ore  district. 

If  coal  and  iron  occur  in  districts  separated  from  each 
other,  one  must  either  bring  the  coal  to  the  iron  or  the 
iron  to  the  coal.  As,  roughly  speaking,  three  tons  of 
coal  are  required  for  smelting  a  ton  of  iron,  it  is,  as  a 
rule,  cheaper  to  take  the  iron  to  the  coal  districts  and  not 
the  coal  to  the  iron  districts.  Natural  conditions  and 
the  manipulation  of  customs  tariffs  and  freight  rates  by 
the  German  Government  have  compelled  the  French 
iron  ore  producers  to  sell  constantly  increasing  quantities 
of  their  ore  to  the  Germans,  who  have  smelted  it  in 
the  famous  Ruhr  district,  where  excellent  coal  abounds. 
The  handbook  of  the  German  iron  trade  informs  us: 

The  French  iron  ore  is  sold  in  constantly  increasing 
quantities  to  the  Ruhr  district.  This  process  has  been 
greatly  favoured  by  applying  the  Minette  ore  railway 
freight  tariff  to  the  railway  stations  on  the  French 
frontier. 

While  the  Germans  have  smelted  the  bulk  of  the  iron 
ore  produced  in  Lorraine  in  the  Ruhr  district,  they  have 
treated  part  of  it  in  Alsace-Lorraine  itself,  where  the 
production  of  iron  has  increased  from  222,070  tons  in 
1872  to  2,908,230  tons  in  1911.  They  were  able  to  do 


THE  PROBLEM  OF  ALSACE-LORRAINE  291 


this  because  coal  can  be  carried  very  cheaply  by  water 
all  the  way  from  the  Ruhr  coalfield  to  the  iron-mines 
of  Alsace-Lorraine.  The  importation  of  German  coal 
into  Alsace-Lorraine  has  increased  steadily  and  very 
greatly  from  year  to  year. 

The  official  facts  and  figures  supplied  in  these  pages 
clearly  prove  that  the  Germans  have  not  succeeded  in 
gaining  the  affections  of  the  inhabitants  of  Alsace-Lorraine ; 
that,  on  the  contrary,  they  have  estranged  them,  and  have 
caused  hundreds  of  thousands  to  exile  themselves,  to 
turn  towards  France.  The  outbreak  of  the  present  War 
led  to  a  further  exodus  of  Alsatians  and  Lorrainers  to 
France  on  the  one  hand,  and  to  more  severe  measures 
of  repression  and  persecution  on  the  part  of  Germany 
on  the  other  hand.  In  view  of  the  official  record  of 
the  relations  between  the  Alsatians  and  the  Germans, 
in  view  of  the  fact  that  the  Germans  have  treated  the 
inhabitants  of  the  two  provinces,  not  as  lost  brothers, 
but  as  irreconcilable  enemies,  it  is  obviously  idle  to  assert 
that  Alsace-Lorraine  is  historically  a  German  land, 
and  that  its  inhabitants  are  Germans  by  race,  language, 
descent,  and  sympathy,  and  that  they  are  satisfied  with 
their  lot  and  wish  for  no  change  of  government.  The 
Alsatians  and  Lorrainers  have  indicated,  not  merely  by 
words,  but  by  deeds,  that  they  wish  to  be  reunited  to 
France,  and  if  the  principle  of  nationalities  and  of  demo¬ 
cracy  has  any  meaning,  it  follows  that  their  desires  should 
be  fulfilled  at  the  Peace. 

The  loss  of  Alsace-Lorraine  has  never  been  forgotten 
by  the  people  of  France.  Most  Frenchmen  and  most 
sympathisers  with  France  desire,  for  sentimental  reasons, 
that  Alsace-Lorraine  should  be  returned  to  France. 
However,  there  are  also  very  important  practical  reasons 
in  favour  of  that  policy.  In  1871  Germany,  inclusive 
of  Alsace-Lorraine,  had  41,000,000  inhabitants,  and 


292  THE  PROBLEM  OF  ALSACE-LORRAINE 


France,  without  these  provinces,  had  36,000,000  inhabi¬ 
tants.  Before  the  outbreak  of  the  present  W  ar  Germany 
had  67,000,000  people  and  France  had  40,000,000  people. 
Since  the  Peace  of  Frankfort  the  population  of  the  one 
country  has  increased  by  26,000,000  and  that  of  the  other 
by  only  4,000,000  people.  Germany’s  population  has 
increased  since  1871  with  amazing  rapidity,  owing  to  the 
enormous  development  of  the  German  manufacturing 
industries.  Their  wonderful  expansion  has  chiefly  been 
due  to  Germany’s  wealth  in  coal.  On  the  other  hand, 
France’s  population  has  remained  almost  stationary 
because  France  lacks  coal.  If  France  should  regain 
Alsace-Lorraine  she  would  receive  2,000,000  new  citizens. 
There  would  then  be  42,000,000  Frenchmen  as  against 
65,000,000  Germans.  However,  she  might  in  addition 
obtain  millions  of  further  citizens  if  the  possession  of 
Alsace-Lorraine  was  coupled  with  provisions  which  would 
enable  France  to  develop  the  manufacturing  industries 
of  the  country,  and  particularly  to  exploit  the  vast 
iron-ore  fields  of  Alsace-Lorraine  over  which  she  would 
obtain  control. 

Coal  and  iron  are  the  twin  foundations  of  modern 
manufacturing.  Both  are  equally  indispensable  in  war. 
Coal  and  iron  provide  arms,  munitions,  ships  and  military 
supplies  of  every  kind,  and  their  possession  and  exploita* 
tion  lead  to  a  vast  increase  of  population,  as  I  have  shown 
in  the  previous  chapter.  It  will  probably  be  better  for 
the  people  of  the  world  if  by  far  the  largest  ironfield 
of  Europe  should  be,  not  in  Germany’s  hands,  but  in  the 
hands  of  France.  The  loss  of  her  largest  ironfield  to 
France  would  undoubtedly  weaken  Germany’s  military 
power,  but  it  would  not  correspondingly  increase  France’s 
strength,  unless  that  country  was  given  at  the  same  time 
a  sufficiency  of  coal  wherewith  to  smelt  the  iron  ores  of 
Alsace-Lorraine.  The  two  provinces  contain  apparently 


THE  PROBLEM  OF  ALSACE-LORRAINE  293 


little  coal.  Close  to  them  lies  the  Saar  coalfield,  which 
Prussia  detached  from  France  after  the  Napoleonic 
Wars.  Many  Frenchmen  demand  the  return  of  the 
Saarbriicken  and  its  coal-mines  in  addition  to  that  of 
Alsace-Lorraine.  However,  the  possession  of  the  Saar 
district ,  though  valuable  for  sentimental  and  practical 
reasons,  would  not  benefit  very  greatly  the  French  iron 
industry  and  France’s  general  industries.  The  Saar 
coalfields  are  comparatively  unimportant,  and  the  coal 
is  poor  in  quality  and  not  very  suitable  for  smelting. 
Therefore  the  Germans  have  treated  the  iron  ore  of  French 
and  German  Lorraine  with  coal  from  the  Ruhr  district. 
They  have  smelted  it  partly  in  the  famous  Dortmund- 
Essen  coal  district,  partly  in  Alsace-Lorraine  itself. 
They  could  transport  coal  cheaply  from  Dortmund  to 
Lorraine,  because  the  two  districts  are  connected  by 
waterways.  In  a  table  previously  given  it  was  shown  that 
between  1872  and  1911  iron  production  in  Alsace-Lorraine 
had  increased  from  222,070  tons  to  2,908,230  tons.  In 
1911  Alsace-Lorraine  alone  produced  as  much  iron  as 
did  all  France  in  1904.  If  the  stipulations  of  the  Peace 
should  enable  France  to  obtain  all  the  Ruhr  coal  she 
requiies,  <die  could  at  a  stroke  double  her  iron  production, 
and  might  create  in  Alsace-Lorraine  a  manufacturing 
district  similar  to  the  celebrated  Rhenish-Westphalian 
district,  where  on  an  area  no  larger  than  a  small  English 
county  six  million  people  live.  The  population  of  the 
two  provinces  might  be  doubled  and  quadrupled  within 
a  few  decades. 

If  the  Peace  should  bring  to  France  the  invaluable 
gift  of  a  sufficiency  of  coal,  not  only  the  industries  of 
Alsace-Lorraine,  but  of  all  France,  would  flourish  as  never 
before.  If,  on  the  other  hand,  France  should  receive 
at  the  Peace  only  Alsace-Lorraine,  the  iron  ore  contained 

in  the  country  would  be  of  little  value  to  the  French 

20 


294  THE  PROBLEM  OF  ALSACE-LORRAINE 


nation.  It  would  merely  enrich  a  few  mineowners  and 
provide  work  for  some  thousands  of  miners.  The  iron 
ore  of  Diedenhofen  and  of  Briey  would  either  remain 
unutilised  or  would  have  to  be  exported  for  smelting. 
As  the  Ruhr  coalfield  is  most  conveniently  situated, 
France  would  be  absolutely  dependent  on  Germany’s 
coal  for  the  prosperity  of  her  industries,  and  the  (German 
Government  would  undoubtedly  exploit  that  position 
to  the  utmost.  It  would  strive  to  develop  the  industries 
of  Germany  and  to  stifle  those  of  France,  and  the  conse¬ 
quence  would  be  that  Germany  would  continue  to  grow 
rapidly  in  wealth,  industrial  strength,  population  and 
warlike  power,  while  France  would  remain  stationary 
and  would  in  course  of  time  become  Germany’s  vassal. 

By  receiving  Alsace-Lorraine  with  an  adequate  supply 
of  coal  France  would  obtain  an  actual  increase  of  2,000,000 
inhabitants  and  a  potential  increase  of  many  millions 
of  her  population.  An  ample  supply  of  coal  would  double 
and  quadruple  the  population  of  Alsace-Lorraine,  and 
would  undoubtedly  speedily  increase  the  birth-rate 
throughout  France,  while  the  loss  of  her  iron  and  the  stag¬ 
nation  of  her  iron  industry  Would  tend  to  limit  the  increase 
of  population  in  Germany.  The  economic  factor  alone 
might  create  a  healthy  balance  between  the  two  countries. 

According  to  the  most  reliable  geological  estimates, 
the  Dortmund-Essen  district  contains  far  more  coal  than 
the  whole  of  the  United  Kingdom.  The  Westphalian 
district  can  therefore  easily  spare  all  the  coal  which  France 
needs.  If  the  War  should  end  in  the  victory  of  the  Allies, 
France  should  receive  not  only  those  territories  which  are 
in  Germany’s  hands  and  to  which  France  has  a  just  claim, 
but  she  should  be  given  at  the  same  time  conditions  which 
will  allow  the  sorely  tried  French  people  to  prosper  and 
to  increase.  Germany  might  pay  the  indemnity  for 
damage  done  to  France  partly  in  coal. 


CHAPTER  XII 

THE  ECONOMIC  POSITION  AND  FUTURE  OF  ITALY* 

Many  Englishmen  view  Italy’s  attitude  during  the  War 
with  somewhat  mixed  feelings.  They  are  full  of  admira¬ 
tion  for  the  gallantry  and  generous  determination  with 
which  in  May,  1915,  at  a  time  when  the  outlook  for  the 
Allies  was  extremely  dark,  Italy  resolved  to  fight  for  the 
Right  and  drew  her  sword  regardless  of  the  consequences. 
At  the  same  time  they  are  greatly  puzzled  by  certain 
aspects  of  Italian  policy  and  by  certain  manifestations 
of  the  national  will  which  seem  scarcely  reconcilable  with 
Italy’s  high  purpose  and  ideal  motives.  They  have 
learned  with  surprise  that  at  the  beginning  of  the  War 
many  Italians,  wishing  to  maintain  a  passive  neutrality 
to  the  end,  passionately  opposed  Italy’s  participation  in 
the  War  and  considered  the  intervention  of  their  country 
a  serious  blunder,  if  not  worse,  and  they  are  still  more 
puzzled  when  they  are  told  that  even  now  many  Italians 
distrust  France  and  England  and  would  welcome  a  peace 
by  agreement  with  the  Central  Powers.  Moreover,  they 
cannot  understand  why  many  of  those  Italian  idealists 
who  have  gone  to  war  in  order  to  vindicate  the  right  of 
nationalities  to  govern  themselves,  and  who  assert  that 
they  are  fighting  in  order  to  free  the  Italians  of  the  Tren 
tino  and  of  Trieste  from  an  alien  yoke,  have  demanded 
that  their  country  should  acquire  by  force  territories 

*  From  The  Nineteenth  Century  and  After,  February,  1918. 

295 


296 


ITALY’S  POSITION  AND  FUTURE 


inhabited  by  Greeks  and  Serbians  without  regard  to  the 
wishes  and  the  national  claims  of  their  inhabitants. 
The  policy  of  absolute  rulers  is  shaped  by  their  personal 
ambitions,  while  that  of  democratic  nations  springs  from 
their  pressing  needs.  Italy,  like  England,  is  a  crowned 
democracy.  Necessity,  not  ambition,  dictates  her  policy. 
Unfortunately,  the  national  needs  of  Italy  are  not  suffi¬ 
ciently  known  abroad.  In  the  following  pages  an  attempt 
will  be  made  to  describe  and  analyse  as  exhaustively 
as  possible  Italy’s  position  and  her  national  desires  and 
requirements,  by  means  of  the  Italian  Government 
publications,  such  as  the  Censuses,  the  Agricultural  and 
Industrial  Reports  and  the  excellent  Annuarii  Statistici 
Italiani,  which  supplement  the  information  which  the 
author  has  gathered  in  the  country.  Such  an  analysis 
may  do  a  great  deal  of  good.  It  should  make  under¬ 
standable  Italy’s  attitude  and  policy,  and  free  it  from  the 
suspicion  of  ambiguity.  A  complete  understanding  of 
Italy’s  vital  needs  may  conceivably  lead  to  certain 
measures  on  the  part  of  the  Allies  which  will  create  the 
closest  intimacy  between  Italy  and  her  partners  for 
decades  and  perhaps  for  all  time.  It  may  lead  to  a  new 
departure  in  international  policy,  to  measures  which 
may  be  summed  up  in  the  phrase  “  An  Empire  for  Italy.” 

The  Italians  possess  to  the  strongest  extent  the  artistic 
temperament.  They  are  a  nation  of  warm-hearted 
idealists  who  are  apt  to  be  carried  away  by  their  feelings. 
Still,  even  the  greatest  idealists  cannot  afford  to  be  guided 
exclusively  by  ideal  motives,  and  to  forget  altogether 
the  compelling  demands  of  practical  necessity.  The 
Italians  are  at  the  same  time  idealists  and  business  men. 
They  went  to  war  not  only  in  order  to  defend  the  Right 
and  to  free  their  brothers  who  live  in  tondage  on  the 
other  side  of  the  Austrian  frontier,  as  many  Englishmen 
believe,  but  they  were  animated  at  the  same  time  by  a 


ITALY’S  POSITION  AND  FUTURE 


297 


larger  and  a  more  practical  purpose,  although  it  was  little 
mentioned.  Even  the  most  passionate  Irredentists  hoped 
that  a  victorious  war  would  not  merely  give  to  their 
country  the  unredeemed  provinces,  but  that  it  would 
establish  the  security  and  economic  well-being  of  the 
people  and  give  to  the  Italian  nation  the  resources  and 
the  elbow-room  which  it  urgently  requires.  It  is  not 
sufficiently  realised  that  Italy’s  expansionist  aims  spring, 
not  from  the  lust  of  conquest,  from  the  desire  of  domina¬ 
ting  and  exploiting  other  nations,  but  from  compelling 
economic  necessity. 

Countless  men  who  have  travelled  in  Italy  have  com¬ 
mented  on  the  fact  that  the  two  great  characteristics 
of  the  country  are  its  beauty  and  its  poverty.  Many 
observers  who  remembered  Italy’s  former  wealth  have 
attributed  the  poverty  of  the  inhabitants  to  a  too  generous 
and  enervating  climate,  to  popular  hostility  to  progress, 
to  the  influence  of  the  Roman  Catholic  Church,  to  the 
exactions  of  the  Italian  landed  nobility,  or  to  sheer  inborn 
laziness  and  stupidity.  The  last  explanation  is  the  one 
most  frequently  heard.  In  reality  the  Italians  are  on 
the  whole  an  exceedingly  wide-awake,  progressive,  hard¬ 
working  and  frugal  race,  which  for  centuries  has  been 
kept  back  by  foreign  tyranny  and  misgovernment,  and 
which  is  severely  handicapped  in  the  race  for  material 
success  by  the  inadequacy  of  the  natural  resources.  The 
beautiful  climate,  the  ever  blue  sky  and  the  glorious 
vegetation  of  the  country  merely  disguise  its  natural 
poverty  to  the  casual  visitor. 

The  prosperity  of  a  country  depends  upon  the  energy 
and  intelligence  of  its  inhabitants  and  upon  a  sufficiency 
of  those  natural  resources  which  enable  the  people  to 
make  a  living.  Agriculture  and  the  manufacturing 
industries  are  the  principal  wealth-creating  factors  of 
a  nation,  for  commerce  by  itself  produces  only  little. 


298 


ITALY’S  POSITION  AND  FUTURE 


As  Italy  possesses  scarcely  any  coal  and  iron,  upon  which 
the  modern  manufacturing  industries  are  based,  she 
depends  for  her  existence  chiefly  on  her  rural  industries, 
and  the  progress  of  these  is  greatly  impeded  by  the  soil, 
configuration  and  climate  of  the  country,  and  by  the 
insufficient  quantity  of  land  available  for  agricultural 
purposes.  Italy  is  one  of  the  most  densely  populated 
countries  in  the  world,  as  the  following  figures  will  show : 

Inhabitants 
per  Square  Mile . 


United  Kingdom  . .  . .  . .  , .  372-6 

Italy  . .  . .  . .  . .  . .  313-5 

Germany  . .  . .  . .  . .  311-0 

France  . .  . .  . .  . .  . .  191-2 

Spain  . .  . .  . .  . .  . .  100-6 


It  will  be  noticed  that  per  square  mile  the  population  of 
Italy  is  three  times  as  great  as  is  that  of  Spain,  that  it 
is  more  than  50  per  cent,  greater  than  that  of  wealthy 
France;  that  it  is  somewhat  greater  than  that  of  Germany, 
which  is  blessed  with  huge  agricultural  plains,  many 
navigable  rivers,  and  with  inexhaustible  mineral  and 
industrial  resources ;  and  that  it  is  almost  as  great  as  that 
of  the  United  Kingdom  itself. 

Before  considering  Italy’s  agriculture  it  should  be 
pointed  out  that  agriculture,  even  if  carried  on  under  the 
most  favourable  conditions,  is  far  less  potent  as  a  wealth- 
creating  factor  than  is  manufacturing.  The  Americans 
produce  in  their  gigantic  country  some  of  the  most  valuable 
crops  in  the  world.  Among  the  nations  of  the  world 
the  United  States  have  the  largest  production  of  wheat, 
maize,  oats,  tobacco,  cotton,  cattle,  pigs,  etc.  Yet, 
according  to  the  American  Census  of  Production  of  1910, 
the  value  of  all  American  crops  was  in  1909  only 
$5,487,161,223,  while  the  value  of  all  manufactured 
goods  produced  in  that  year  amounted  to  no  less  than 
20,767,546,000  dollars,  or  almost  four  times  as  much. 


ITALY’S  POSITION  AND  FUTURE 


299 


Agriculture  is  carried  on  most  easily  and  most  profit¬ 
ably  on  the  level  ground  of  sheltered  and  well-watered 
plains.  A  glance  at  the  map  shows  that  Italy  is  an  ex¬ 
ceedingly  mountainous  land,  that  the  proportion  of 
level  plain  is  very  small.  As  the  large  forests  which 
formerly  covered  the  Italian  hills  were  ruthlessly  cut 
down  in  the  past,  the  earth  which  covered  them  was 
washed  into  the  valleys.  The  hills  became  barren,  and 
the  consequence  is  that  the  Italian  mountain  streams 
dry  up  in  time  of  drought  and  become  raging  destructive 
torrents  when  it  rains.  Modern  Italy  is  endeavouring 
with  infinite  labour  to  reafforest  the  mountains  and  to 
control  the  streams. 

Italy  possesses  not  only  a  totally  insufficient  proportion 
of  level  ground,  but  a  very  large  part  of  the  Italian 
plains  consists  of  marshes  and  swamps.  Moreover,  the 
Italian  plains,  and  the  uplands  too,  are  stricken  by 
malaria,  which  is  almost  universal.  Malaria  is  a  notifi¬ 
able  disease  in  Italy.  In  1914  no  fewer  than  214,092 
cases  of  malaria  were  reported  to  the  authorities.  Owing 
to  the  energetic  steps  taken  by  the  Italian  Government, 
which  is  draining  swamps,  introducing  good  sanitation, 
providing  free  quinine  for  the  poor,  etc.,  the  deadliness  of 
the  scourge  has  much  diminished.  The  deaths  from 
malaria  have  thus  been  reduced  from  13,358  in  1901-1902 
when  the  State  began  the  distribution  of  quinine,  to 
2,042  in  1914.  Still,  malaria  debilitates  a  large  part 
of  the  population.  The  prevalence  of  this  disease  has 
forced  millions  of  Italians  to  abandon  the  plain  where 
they  have  to  work  and  to  live  in  towns  on  the  hills. 
Hence  farmers  and  labourers  lose  many  hours  every  day 
in  going  to  and  from  their  work,  and  in  carting  produce 
of  every  kind,  and  even  water,  up  and  down  the  hills 
which  they  inhabit. 

The  Italian  climate,  which  seems  so  generous  to  the 


300 


ITALY’S  POSITION  AND  FUTURE 


tourist,  is,  after  all,  not  very  favourable  to  agriculture. 
The  country  suffers  frequently  from  drought,  which 
plays  havoc  with  the  harvest.  That  may  be  seen  from 
the  startling  fluctuations  in  the  produce  of  the  great 
staple  crops.  In  1909  Italy  produced  61,772,710  hecto¬ 
litres  of  wine.  In  1910  she  produced  only  29,293,240 
hectolitres,  or  less  than"  half  as  much.  In  1909  she 
produced  2,559,200  hectolitres  of  olive  oil,  but  in  1910 
only  1,384,600  hectolitres,  or  about  half  the  former 
quantity.  Between  1911  and  1912  the  olive-oil  production 
declined  from  2,422,300  hectolitres  to  958,000  hectolitres, 
or  to  nearly  one- third;  while  the  important  chestnut 
crop  fell  from  8,290,000  quintals  in  the  former  year  to 
4,980,000  in  the  latter  year.  Between  1914  and  1915 
the  wine  production  sank  from  43,046,000  hectolitres  to 
19,055,000  hectolitres,  or  to  less  than  one-half. 

Italian  agriculturists  have  endeavoured  to  overcome 
their  difficulties  by  unremitting  and  intelligent  labour. 
They  have  drained  swamps,  planted  forests,  regulated 
the  mountain  torrents  and  irrigated  the  land  subject  to 
drought.  They  have  introduced  many  exotic  plants 
and  animals.  Thus,  Italy  produces  vast  quantities  of 
tobacco,  cotton,  rice,  maize,  Indian  figs,  flax,  hemp, 
silk,  sugar,  etc.,  and  buffaloes  wallow  in  the  swamps. 
Besides,  they  have  hewn  countless  terraces  out  of  the 
barren  rocks,  and  have  covered  them  with  earth,  sea¬ 
weed  and  other  manure  carried  up  in  baskets.  Hence 
mountains  which  consisted  formerly  of  sheer  rock  are 
now  covered  with  prolific  orange  and  lemon  groves 
vines,  etc. 

Owing  to  the  care  and  labour  bestowed  upon  agricul¬ 
ture,  the  production  of  Italy’s  rural  industries  has  rapidly 
and  continually  increased,  as  the  following  representative 
figures  show: 


ITALY’S  POSITION  AND  FUTURE 


301 


Production  of — 


Year. 

Grain. 

Maize. 

Wine. 

Quintals. 

Quintals. 

Hectolitres. 

Average  1879-1883 

36,318,000 

21,356,000 

36,760,000 

1911 

52,362,000 

23,796,000 

42,654,000 

1912 

45,102,000 

25,063,000 

44,123,000 

1913  .. 

58,452,000 

27,532,000 

52,240,000 

Italy’s  agriculture  has  prospered  largely  because, 
under  Government  auspices,  scientific  processes  have 
been  applied  to  it.  It  is  worth  noting  that  the  consump¬ 
tion  of  superphosphates  by  the  Italian  agriculturists 
has  increased  from  4,311,512  quintals  for  the  average 
of  the  years  1901-1903  to  10,409,663  for  the  average  of 
the  years  1910-1912. 

The  number  of  animals  kept  has  vastly  increased. 
Between  1876  and  1908,  in  which  years  live-stock  censuses 
were  taken,  the  following  changes  have  occurred : 


Year. 

Horses. 

'  «•.  / ' 

Mules. 

Asses. 

Cattle. 

1876 

625,957 

292,983 

498,766 

3,489,125 

1908 

955,878 

388,337 

849,723 

6,218,227 

Year. 

Sheep. 

Goats. 

Figs. 

1876  .. 

6,977,104 

1,688,478 

1,553,582 

1908  . . 

11,162,926 

2,714,878 

2,507,798 

It  will  be  noticed  that  during  the  period  under  considera¬ 
tion  very  important  increases  have  been  universal. 
The  great  progress  in  Italy’s  agriculture  may  furthermore 


302 


ITALY’S  POSITION  AND  FUTURE 


be  seen  from  the  rapid  increase  of  certain  exports  such  as 
the  following : 

Exports  of — 


Y  ear. 

Maccaroni,  etc. 

Oranges  and 
Lemons. 

Cheese. 

1893  .. 

Quintals. 

89,148 

Quintals. 

1,978,134 

Quintals. 

66,397 

1903  .. 

265,904 

3,095,860 

150,405 

1913  .. 

709,921 

4,365,409 

328,044 

Although  Italy’s  agriculture  has  marvellously  pro¬ 
gressed,  the  income  derived  from  it  is  comparatively 
small.  The  prices  of  Italian  wine,  oil,  oranges,  lemons, 
figs,  etc.,  have  been  depressed  by  the  competition  of 
France,  Spain,  United  States,  Asia  Minor,  North  Africa, 
and  of  other  countries  which  can  produce  and  export 
very  cheaply.  Hence  the  Italian  agriculturists  derive 
only  small  profits.  Life  is  a  very  hard  struggle  for  them. 

Italy’s  soil,  with  the  exception  of  the  Lombardo- 
Venetian  Plain  and  other  favoured  spots,  is  semi-arid 
and  poor.  Unfortunately,  the  sea  which  washes  Italy’s 
extensive  shores  does  not  compensate  the  country  for 
the  insufficiency  of  its  agricultural  resources,  for  the  sea 
lacks  fish.  Exactly  as  it  is  widely  believed  that  Italy’s 
agriculture  is  exceptionally  prosperous  because  the 
country  produces  luxury  foods  such  as  oranges,  olives, 
figs,  almonds,  peaches,  wine,  etc.,  even  so  it  is  often 
assumed  that  Italy’s  fishing  is  a  great  source  of  wealth 
because,  apart  from  fish,  the  Italian  fishermen  gather 
such  valuable  articles  as  coral  and  sponges.  In  1912 
the  total  value  of  all  the  fish  caught  came  to  £951,000, 
and  that  of  all  coral  and  sponges  gathered  to  only  £54,400. 
In  the  aggregate  the  Italian  fishing  industry  produced 
in  1912  a  harvest  worth  £1,005,400.  The  insignificance 
of  that  amount  may  be  gauged  from  the  fact  that  in  the 


ITALY’S  POSITION  AND  FUTURE 


303 


same  year  the  British  fisheries  yielded  fish  and  shell¬ 
fish  to  the  value  of  £13,234,426.  In  Italian  fishing,  as 
in  Italian  agriculture,  the  maximum  of  labour  yields 
only  a  minimum  of  profit. 

Italy’s  difficulties  in  making  a  living  by  agriculture 
and  fishing  are  great,  but  her  difficulties  in  developing 
her  manufacturing  industries  are  still  greater.  Modern 
manufacturing  is  founded  upon  coal  and  iron.  Unfor¬ 
tunately,  among  the  great  nations  of  the  world  Italy 
is  poorest  in  the  most  essential  minerals.  Her  coal 
production  compares  with  that  of  some  other  countries 
as  follows: 


Coal  and  Lignite  produced  in  1912. 


In  United  States 
In  United  Kingdom 
In  Germany 
In  Belgium 
In  Italy. . 


Tons. 

525,427,837 

260,416,338 

255,810,094 

22,972,000 

663,812 


The  United  Kingdom  produces  more  coal  in  a  single  day 
than  Italy  produces  in  a  whole  year,  and  little  Belgium 
produces  thirty- three  times  as  much.  Moreover,  the 
trifling  quantity  of  coal  raised  in  Italy  is  of  very  low 
quality. 

Italy’s  lack  of  iron  ore  is  equally  striking,  as  will  be 
seen  from  the  following  table : 


Iron-Ore  Production  in  1912. 


In  United  States 
In  Germany 
In  France 

In  United  Kingdom 
In  Italy 


Tons. 

60,440,100 

22,692,000 

19,500,000 

14,011,700 

582,066 


It  is  believed  by  many  that  Italy  derives  a  large  income 
from  the  exploitation  of  her  minerals,  because  she  pro- 


304 


ITALY’S  POSITION  AND  FUTURE 


duces  considerable  quantities  of  sulphur,  tin  and  beautiful 
marble.  However,  the  competition  of  other  nations  has 
kept  prices  so  low  that  Italy  obtains  only  a  trifling  in¬ 
come  from  her  mineral  resources.  Her  relative  poverty 
in  that  respect  will  clearly  be  seen  from  the  following 
figures  : 

Value  of  All  Minerals  produced  in  1912. 

£ 

In  United  States  . .  . .  . .  448,794,498 

In  United  Kingdom  . .  . .  . .  131,220,853 

In  Italy  .  3,768,000 

In  order  to  supply  her  railways,  ships,  factories,  gas¬ 
works,  etc.,  with  the  necessary  fuel,  Italy  must  import 
the  bulk  of  the  coal  used,  which  thus  is  very  expensive 
to  the  consumers.  In  1912,  for  instance,  when  she  pro¬ 
duced  663,812  tons  of  coal,  she  imported  from  abroad 
13,305,000  tons,  or  twenty  times  as  much. 

Italy’s  iron  and  steel  industry  depends  on  foreign 
countries  not  only  for  its  coal,  but  also  for  the  bulk  of 
its  iron,  which  is  imported  partly  in  the  form  of  ore  and 
partly  in  that  of  metal.  Notwithstanding  her  lack  of 
coal  and  iron,  Italy  has  succeeded  in  rapidly  increasing 
her  production  of  steel.  While  in  1900  she  produced 
only  115,887  tons  of  steel,  in  1912  she  produced  801,907 
tons.  It  is  obvious,  however,  that  the  position  of  the 
Italian  iron  and  steel  industry  is  exceedingly  precarious 
owing  to  its  complete  dependence  upon  imported  coal 
and  iron 

Exactly  as  the  Italian  agriculturists  have  succeeded 
in  cultivating  the  barren  rocks  by  converting  them  into 
prolific  gardens,  the  Italian  manufacturers  have  learned 
how  to  manufacture  without  coal.  Electrical  and  other 
machinery  has  been  called  in  to  replace  steam-power. 
The  development  in  the  use  of  power  in  the  manufacturing 


ITALY’S  POSITION  AND  FUTURE 


305 


industries  has  been  as  follows  according  to  the  last  Indus¬ 
trial  Censuses: 


Horse-Powers  in  the  Manufacturing  Industries. 


Y  ear. 

Steam. 

Hydraulic. 

Gas,  Oil¬ 
engines,  etc. 

Total. 

1903 

289,735 

418,481 

26,058 

734,274 

1911 

471,043 

951,836 

197,525 

1,620,404 

Between  1903  and  1911  the  industrial  horse-power  em¬ 
ployed  has  more  than  doubled,  and  the  progress  made 
has  been  particularly  remarkable  in  the  case  of  gas  and 
oil  engines  and  of  hydraulic  power.  Happily,  Nature 
has  given  to  the  Italians  an  abundance  of  power  in  the 
form  of  waterfalls  which  can  be  converted  into  electricity. 
According  to  Government  investigations,  at  least  5,000,000 
horse-powers  are  available,  and  the  conquest  of  the 
Trentino  should  furnish  an  additional  250,000  horse¬ 
powers.  Vast  power  can  also  be  provided  by  the  forma¬ 
tion  of  artificial  lakes  which  the  Government  has  planned. 
The  Italian  authorities  intend  not  only  to  provide  an 
abundance  of  electrical  power  for  industrial  purposes, 
but  to  electrify  the  whole  of  the  national  railways, 
eliminating  the  use  of  coal  as  far  as  possible.  Possibly 
science  will  succeed  in  improving  electrical  smelting  tc 
such  an  extent  that  the  Italian  iron  and  steel  industries 
also  will  become  independent  of  imported  coal. 

Among  the  most  progressive  Italian  manufacturing 
industries  are  the  textile  industries,  the  production  of 
machinery — Italian  silks,  cottons,  motor-cars,  etc.,  are 
universally  appreciated — the  electrical  industry,  the 
chemical  industry,  etc.  The  expansion  of  the  chemical 
industry  may  be  gauged  from  the  fact  that  Italy’s  pro¬ 
duction  of  sulphuric  acid  increased  from  59,362  tons  in 


306 


ITALY’S  POSITION  AND  FUTURE 


1893  to  644,713  tons  in  1913.  Similar  increases  have 
taken  place  in  other  chemical  productions. 

The  energy  and  success  with  which  Italy  has  developed 
her  manufacturing  industries  may  be  seen  from  the  rapid 
increase  in  the  imports  of  certain  raw  materials  employed 
in  manufacturing  and  in  the  exports  of  manufactured 
goods. 

Imports. 


Year. 

i 

Cotton. 

Wool. 

Coal. 

Copper  and 
Brass. 

** 

Quintals. 

Quintals. 

Tons. 

Quintals. 

1893 

987,080 

89,983 

3,724,401 

30,426 

1903 

1,541,646 

153,542 

5,546,823 

60,963 

1913 

2,018,808 

i 

286,391 

10,834,008 

502,802 

Exports. 


Year. 

' 

Silk  Textiles. 

Cotton  Thread. 

Cotton  Cloth. 

1893  . . 

Lire. 

18,866,000 

Quintals. 

7,087,000 

Quintals. 

28,416,000 

1903  . . 

68,454,000 

92,018,000 

172,916,000 

1913  . . 

108,225,000 

146,142,000 

493,946,000 

Of  course,  there  are  industries  which  have  not  pros¬ 
pered.  Still,  on  the  whole  the  Italian  industries  have 
progressed  very  greatly.  Between  1893  and  1913  the 
imports  of  all  raw  materials  used  in  the  industries  increased 
from  635,000,000  lire  to  2,092,000,000  lire,  or  more  than 
threefold ,  while  the  exports  of  all  partly  or  wholly  manu¬ 
factured  goods  increased  during  the  same  period  from 
468,000,000  lire  to  1,389,000,000  lire,  or  almost  exactly 
threefold. 

While  Italian  agriculture  and  the  Italian  manufacturing 
industries  have  been  heavily  handicapped  by  Nature, 


ITALY’S  POSITION  AND  FUTURE 


307 


Italy’s  commerce  has  been  similarly  handicapped  both 
by  Nature  and  by  the  action  of  man.  The  length  and 
narrowness  of  Italy’s  territory  and  the  difficulty  of  carry¬ 
ing  goods  from  one  seashore  to  the  other  because  of  the 
intervening  mountain  walls  have  been  a  great  impediment 
to  internal  commerce.  Owing  to  its  configuration,  cheap 
inland  transport,  which  is  one  of  the  mainsprings  of 
commerce,  is  lacking.  Italy  possesses  no  navigable  rivers 
except  in  the  Lombardo- Venetian  Plain,  and  scarcely 
any  canals,  for  shipping  on  rivers  and  canals  is  practicable 
only  on  level  plains.  Lastly,  the  construction  of  railways 
and  roads  is  most  expensive  in  Italy.  Innumerable  tunnels 
have  to  be  bored  through  rocks,  chasms  have  to  be 
bridged,  and  both  roads  and  railroads  have  frequently 
to  be  based  upon  enormous  viaducts,  which  form  so 
noteworthy  a  characteristic  of  the  Italian  landscape. 
Both  railroads  and  carriage-roads  have  to  overcome 
heavy  gradients,  which  are  very  unfavourable  to  cheap 
and  easy  transportation.  We  can,  therefore,  not  be 
surprised  that  inland  transport  is  comparatively  dear  and 
insufficiently  developed,  except  in  the  Lombardo- Venetian 
Plain  and  other  favoured  spots. 

Italy  lies  midway  between  the  East  and  the  West. 
The  great  wealth  of  ancient  Venice,  Florence  and 
Genoa  was  due  to  the  fact  that  these  towns  handled  a 
large  portion  of  the  commerce  which  was  carried  to  and 
fro  between  Central  and  Western  Europe  on  the  one  hand 
and  Asia  and  Africa  on  the  other.  Owing  to  their  geo¬ 
graphical  position  and  to  the  piercing  of  the  Alps  by 
numerous  tunnels,  Venice  and  Genoa  should  still  handle 
a  very  large  portion  of  the  international  trade,  to  the 
great  benefit  of  Italy.  Unfortunately,  both  Germany 
and  Austria  have  succeeded  in  depriving  Italy  of  the 
bulk  of  her  legitimate  share  in  international  commerce. 
By  the  preferential  tariff  of  the  State  railways  Germany 


308 


ITALY’S  POSITION  AND  FUTURE 


and  Austria-Hungary  have  succeeded  in  diverting  the 
trade  of  South  Germany,  Southern  Austria  and  Switzer¬ 
land,  which  naturally  should  flow  by  way  of  Genoa  and 
Venice,  to  Hamburg,  Bremen,  Antwerp  and  Trieste, 
to  the  great  injury  of  the  Italian  merchants,  the  Italian 
railways,  the  Italian  Merchant  Marine  and  the  Italian 
people. 

Notwithstanding  the  difficulties  caused  by  the  unkind¬ 
ness  of  Nature  and  the  selfishness  of  Germany  and  Austria- 
Hungary,  Italy’s  trade  and  commerce  have  wonderfully 
increased  owing  to  the  energy,  ability  and  industry  of 
the  people.  The  expansion  of  Italy’s  oversea  trade  may 
be  gauged  from  the  following  figures : 


Tonnage  of  Goods  forwarded  from  and  received  at  Italian 


Year. 

1883 

1893 

1903 

1913 


Ports. 

Tons. 

.  10,629,027 

. 13,213,131 

. .  . .  . .  19,419,876 

.  31,821,882 


Since  1883  Italy’s  sea  trade  has  exactly  trebled,  and 
during  the  last  decade  it  has  increased  by  more  than 
50  per  cent. 

The  development  of  Italy’s  internal  trade  may  be  seen 
by  the  wonderful  development  of  her  banks.  The  ac¬ 
counts  of  the  Banca  Commerciale,  the  leading  institution, 
show  the  following  progress : 


Year. 

Capital. 

Deposits. 

Balances. 

Securities. 

Lire. 

Lire. 

Lire. 

Lire. 

1895  . . 

20,000,000 

64.924,650 

^0,152,931 

53,546,598 

1905  .. 

105,000,000 

129,698,124 

254,509,804 

490,841,771 

1913  . . 

130,000,000 

232,857,338 

512,929,167 

819,602,962 

ITALY’S  POSITION  AND  FUTURE 


30  9 


On  December  31,  1916,  the  total  assets  ol  the  Banca 
Commerciale  came  to  2,941,988,583  lire,  or  to  £3 18,000,000. 
That  bank  ranks  now  among  the  foremost  institutions 
of  the  world. 

The  Italian  people  have  not  only  worked  hard  in  field, 
factory  and  counting-house,  but  they  have  also  saved 
hard.  The  Italians  are  probably  the  most  thrifty  nation 
in  Europe.  At  any  rate,  it  may  be  asserted  that  in  no 
European  country  have  popular  savings  accumulated 
more  rapidly  than  in  Italy.  The  Italian  Government 
Statistics  supply  us  with  the  following  most  remarkable 
record : 


Deposits  in  Savings  Banks  and  Savings  Institutions. 


1883  .. 
1893  .. 
1903  .. 
1913  .. 


Lire. 

1,151,013,670 

1,977,025.416 

3,256,132,950 

5,796,151,626 


These  figures  exclude  the  deposits  in  the  Banks  proper. 
Including  these  the  deposits  in  1913  amounted  to 
7,220,376,045  lire,  or  to  about  £300,000,000. 

Only  those  who  have  lived  in  Italy  or  who  have  studied 
impartial  and  reliable  records  can  realise  the  self-abnega¬ 
tion  with  which  the  Italian  workers  save  in  order  to 
leave  a  competency  to  their  families.  Even  the  poorest 
workers — and  the  unskilled  Italian  labourers  are  wretch¬ 
edly  poor — put  money  by,  stinting  themselves  of  the 
very  necessaries  of  life.  The  thrift  of  the  Italian  labourers 
has  attracted  attention  wherever  they  have  gone.  In 
September,  1907,  the  United  States  Department  of 
Commerce  and  Labour  published  a  most  interesting 
Report  on  Italian ,  Slavic  and  Hungarian  Immigrants , 
which  shows  that  among  the  foreign  immigrant  labourers 
the  Italians  are  by  far  the  thriftiest.  That  fact  is  not 
based  on  vague  estimates,  but  on  comprehensive  exact 

21 


310 


ITALY’S  POSITION  AND  FUTURE 


and  comparative  data  furnished  by  many  hundreds 
of  observations  made  during  a  considerable  space  of  time. 
We  read,  for  instance: 

The  average  income  per  man  for  a  representative  month 
in  1905,  for  the  679  men  shown  above,  was  $34.49,  the 
average  cost  of  living  was  $7.20,  and  the  average  surplus 
over  cost  was  $27.29. 

The  average  income  per  man  for  a  representative  month 
in  1906,  for  the  1530  men  shown,  was  $37.07,  the  average 
cost  of  living  was  $6.79,  and  the  average  surplus  over 
cost  was  $30.28. 

It  will  be  noticed  that,  roughly  speaking,  the  Italian 
labourers  lived  on  about  Is.  a  day,  saving  the  rest  of  their 
wage.  In  the  first  example  given  the  Italian  labourers 
spent  on  themselves  only  one-fifth  of  their  income, 
saving  the  remaining  portion.  In  the  second  they  spent 
about  one-sixth  of  their  earnings,  saving  the  remaining 
five- sixths.  Whereas  in  the  anthracite  region  Anglo- 
Saxon  labourers  pay  for  their  board  from  $16  to  $18 
a  month,  and  whereas  Slavonic  labourers  paid  from  $10 
to  $12,  the  Italian  labourers  expended,  according  to  the 
Report,  only  $5  per  month.  Unfortunately,  many 
Italian  labourers  have  undermined  their  health  by  exag¬ 
gerated  thrift.  The  American  Report  stated: 

Contractors  have  in  many  instances  complained  of 
the  lack  of  strength  of  the  Italian  labourers  in  the  United 
States,  and  have  attributed  it  to  insufficient  food.  The 
general  manager  of  the  leading  contracting  company 
in  the  Southern  States,  writing  from  Tennessee,  says: 
“  The  main  trouble  with  the  Italian  is  that  he  does 
not  eat  enough  to  furnish  him  with  the  proper  nourish¬ 
ment  needed  in  the  work.  Of  course,  if  a  man  is  not 
properly  fed  he  cannot  do  a  good  day’s  work.  .  . 

With  this  slender  fare  they  cannot  maintain  their 
strength,  and  soon  sink  into  the  anaemic  condition  which 
precedes  consumption.  It  is  almost  useless  to  point 


ITALY’S  POSITION  AND  FUTURE  311 


out  to  them  the  necessity  of  more  food  to  meet  the  harsher 
climate  and  heavier  work  of  this  country.  They  have 
come  here  to  earn  and  to  save  money,  and  save  it  they 
will,  at  the  expense  of  health  and  life. 

It  may  be  safely  asserted  that  practically  all  Italians 
save.  However,  savings  deposits  vary  greatly  in  Italy. 
In  the  Northern  provinces,  where  water-power  is  cheap 
and  plentiful,  and  especially  in  the  Lombardo- Venetian 
Plain,  savings  per  head  are  high.  In  the  poor  and  back¬ 
ward  South  they  are  low.  In  the  province  of  Lombardy 
the  savings  amounted  in  1912  to  288*70  lire  per  head  of 
population,  but  they  came  in  Sicily  to  only  88*13  lire,  and 
in  the  Abruzzi  to  only  72*02  lire  per  head  of  population. 

It  should  be  borne  in  mind  that  the  savings  deposited  in 
the  Italian  banks  are  not  all  derived  from  earnings  in 
Italy.  The  Italian  emigrants  send  their  savings  home, 
and  their  relatives  place  them  into  the  savings  banks 
for  security.  Italian  Government  officials  and  econo¬ 
mists  usually  estimate  that  the  Italian  emigrants  remit 
to  the  mother  country  at  least  500,000,000  lire  per  anpum. 
On  the  other  hand,  it  should  not  be  believed  that  the 
sums  deposited  in  the  savings  banks  represent  the  total 
of  the  popular  savings.  A  very  large  part  of  these  is 
invested  in  freehold  farms,  houses  and  Italian  Govern¬ 
ment  Stock.  During  the  last  twenty  years  at  least 
£200,000,000  of  Italian  Government  Stock  has  been 
bought  abroad  by  the  Italian  people  and  has  been  sent 
to  Italy.  Two  decades  ago  Italy  held  only  about  50  per 
cent,  of  the  national  debt.  In  1913  the  Italians  held 
more  than  80  per  cent,  of  their  national  debt.  As  the 
Italian  business  men  invest  their  savings  largely  in  their 
business,  it  is  clear  that  the  savings  banks  deposits  have 
been  vastly  increased,  and  that  the  price  of  the  Govern¬ 
ment  Stock  has  been  raised  from  year  to  year  chiefly 
through  the  determined  thrift  of  the  poorer  classes, 


312 


ITALY’S  POSITION  AND  FUTURE 


through  the  savings  of  small  farmers,  shopkeepers,  manual 
workers,  etc.  Every  Italian  banker  knows  that  this  is 
the  case. 

Study  of  Italian  industrial  conditions  shows  that  not 
only  agriculture,  the  manufacturing  industries  and 
commerce  have  rapidly  progressed,  but  that  the  whole 
country  has  advanced,  and  that  the  working  people  have 
had  a  considerable  share  in  the  advance  made.  The 
capital  of  the  co-operative  societies  has  increased  between 
1906  and  1910  from  55,101,936  lire  to  151,852,579  lire. 
In  town  and  country  the  workers  display  increasingly 
a  sturdy  sense  of  independence. 

The  material  progress  of  the  nation  as  a  whole  is  evident 
to  all  who  habitually  visit  Italy.  Moreover,  it  appears 
clearly  from  the  Government  statistics.  In  1894-1895 
Italy  had  only  11,173  telephone  subscribers.  By  1914- 
1915  their  number  had  increased  to  99,593.  In  1897- 
1898,  186,862,000  units  of  electric  light  were  used  in 
Italy.  By  1915-1916  their  number  had  increased  to 
2,163,396,000  units. 

Although  the  Italian  Government  and  people  have 
done  their  utmost  to  advance  the  country  materially, 
intellectual  progress  has  not  been  neglected.  The  sta¬ 
tistics  relating  to  the  Universities,  technical  schools, 
libraries,  benevolent  institutions,  etc.,  show  a  rapid  and 
uninterrupted  advance.  The  proportion  of  analphabets 
above  six  years  for  the  whole  of  the  kingdom  was  in  1872 
69  per  cent.,  in  1882  62  per  cent.,  in  1901  48  per  cent., 
and  in  1911  38  per  cent.  The  number  of  analphabets 
from  12  to  15  years  old  was  reduced  between  1901  and 
1911  from  37-6  per  cent,  to  24*6  per  cent.  Analphabets 
are  getting  very  rare  in  the  Northern  provinces,  where 
education  is  excellent.  In  1872  there  were  large  stretches 
of  the  country  where  80  per  cent,  of  the  population  could 
neither  read  nor  write. 


ITALY’S  POSITION  AND  FUTURE 


313 


From  the  facts  and  figures  given  in  the  preceding  pages 
it  will  be  clear  that  the  Italian  people,  working  and  saving 
with  the  greatest  determination,  have  achieved  remarkable 
progress  in  every  direction.  Working  and  saving  with 
heroic  energy  and  self-denial,  they  have  raised  their 
country  very  considerably.  Nevertheless,  Italy  has 
remained  poor  and  is  unable  to  nourish  her  inhabitants. 
The  reason  is  that  the  Italian  population  increases  at  a 
quicker  rate  than  the  national  wealth.  During  the  last 
fifty  years  of  the  Census  Italy’s  population  has  grown  as 
follows : 


Population  within  the  Present  Limits  of  Italy. 


Year . 

1862 

25,000,000  —  87*2  per  square  kilometre. 

1872  . . 

26,801,154  =  93-5  „ 

99  9  9 

1882  . . 

28,459,628  =  99-3  „ 

99  99 

1901  . . 

32,475,253  =  113*3  „ 

9  9  99 

1911  .. 

34,671,377  =  120-9  „ 

99  99 

The  rapid  increase  of  the  national  population  has 
forced  the  Italians,  who  formerly  were  a  home-staying 
people,  to  emigrate  in  order  to  make  a  living.  Italian 
emigration  has  begun  only  recently,  but  it  has  increased 
at  a  rate  which  is  positively  terrifying  to  many  patriotic 
Italians.  According  to  the  figures  furnished  by  the 
emigration  authorities,  Italian  emigration  has,  since 
1881,  developed  as  given  in  table  on  p.  314. 

The  increase  of  Italy’s  emigration  is  truly  alarming 
In  1881  the  bulk  of  the  Italian  emigrants  went  to  Euro¬ 
pean  and  to  the  Mediterranean  countries  close  at  hand, 
such  as  Tunis.  In  1913  the  bulk  of  the  Italian  emigrants 
went  to  Transoceanic  countries.  Between  1881  and  1913 
the  number  of  Transoceanic  emigrants  increased  from 
41,064  to  the  gigantic  number  of  559,566.  The  conse¬ 
quences  of  this  enormous  loss  of  population  are  revealed 
in  the  Censuses.  Emigration  is  particularly  great  from 


314 


ITALY’S  POSITION  AND  FUTURE 


the  poorest  provinces  of  Italy,  from  the  South.  It  is 
fairly  great  from  the  Central  provinces,  and  comparatively 
small  from  the  Northern  provinces,  and  especially  from 
those  which  possess  cheap  and  plentiful  water-power 
and  which  are  situated  in  the  bountiful  Lombardo- 
Venetian  Plain.  While  the  population  of  Lombardia, 
Venetia,  Liguria,  Emilia,  is  increasing  rapidly  and  while 
that  in  the  Marche,  Umbria,  Calabria,  is  almost  stagnant, 


Italian  Emigration. 


Year. 

\ 

To  European 
and 

Mediterranean 

Countries. 

Trans¬ 

oceanic. 

Total. 

Immigrants 

Returning 

from 

Overseas. 

1881  .. 

94,768 

41,064 

135,832 

? 

1886  .. 

84,952 

82,877 

167,829 

1 

1891  .. 

106,056 

187,575 

293,631 

•t 

1896  .. 

113,235 

194,247 

307,482 

? 

1901  .  . 

253,571 

279,674 

533,245 

? 

1906  .. 

276,042 

511,935 

787,977 

157,987 

1907  .. 

288,774 

415,901 

704,675 

248,428 

1908  .. 

248,101 

238,573 

486,673 

300,834 

1909  .. 

226,355 

399.282 

625,637 

134,210 

1910  .. 

248,696 

402,779 

651,475 

161,148 

1911  .. 

271,065 

262,779 

533,844 

218,998 

1912  .. 

308,140 

403,306 

711,446 

182,990 

1913  .. 

313,032 

559,566 

872,598 

188,978 

that  of  the  Abruzzi,  of  Campania,  apart  from  Naples, 
of  the  Basilicata  and  of  parts  of  Sicily,  has  actually 
decreased. 

Of  the  Italian  emigrants,  the  vast  majority,  about  81 
per  cent.,  are  men,  and  the  result  is  that  at  the  Census 
of  1911  the  persons  of  the  female  sex  were  found  to  be 
far  more  numerous  than  those  of  the  male  sex  in  several 
provinces.  In  the  Abruzzi  and  Molisi,  for  instance, 
there  were  767,893  females  and  only  662,813  males. 
In  Campania  there  were  1,715,354  females  and  only 


ITALY’S  POSITION  AND  FUTURE 


315 


1,596,636  males.  In  Calabria  there  were  750,015  females 
and  only  652,046  males.  Needless  to  say,  the  males  who 
remain  in  the  provinces  from  which  emigration  is  particu¬ 
larly  heavy  consist  very  largely  of  old  men  and  young 
boys.  Italy  is  losing  by  emigration  the  flower  of  her 
manhood. 

As  the  emigration  problem  is  one  of  the  most  serious, 
if  not  the  most  serious,  Italian  problem,  it  is  necessary 
to  study  it  a  little  more  closely.  Let  us,  then,  inquire 
which  countries  are  most  attractive  to  the  Italian  emi¬ 
grants.  According  to  the  Government  returns,  Italian 
emigrants  went  in  1913  to  the  following  countries: 


To  Prance 
To  Switzerland 
To  Austria-Hungary 
To  Germany. . 

To  United  States 

* 

To  Canada  . . 

To  Argentina 
To  Brazil 
To  Australasia 


83,435 

90,019 

39,033 

81,947 

376,776 

30,699 

111,500 

31,952 

1,682 


A  detailed  analysis  of  emigration  from  the  various 
Italian  provinces  shows  that  the  men  from  the  Northern 
provinces  go  principally  to  Europe — France,  Switzerland, 
Austria-Hungary  and  Germany,  which  are  near  to  hand ; 
while  the  emigrants  from  the  Central  and  especially  from 
the  Southern  provinces  go  oversea,  especially  to  the 
United  States,  Canada,  Argentina  and  Brazil. 

It  is  highly  significant  that  of  the  Italian  emigrants 
about  81  per  cent,  are  men  and  only  about  19  per  cent, 
are  women.  As  a  rule,  the  men  emigrate  and  leave  their 
wives  and  children  at  home.  The  Italians  are  intensely 
fond  of  their  country  and  of  their  surroundings,  and 
they  abhor  the  idea  of  settling  permanently  abroad. 
They  emigrate  only  in  the  hope  of  saving  enough  money 


316 


ITALY’S  POSITION  AND  FUTURE 


to  live  in  beautiful  Italy.  Herein  lies  the  pathos  of  the 
great  emigration  movement,  for  naturally  very  many 
Italian  emigrants  are  not  able  to  return.  Hence  they 
remain  abroad  much  against  their  will.  Although  the 
vast  majority  of  Italian  emigrants  mean  to  leave  their 
country  only  for  a  short  spell,  intending  to  come  back 
as  soon  as  possible,  vast  numbers  have  remained  abroad. 
They  have  remained  abroad  either  because  they  have 
not  succeeded  in  accumulating  enough  money  or  because 
they  discovered  that  they  could  make  a  better  living 
abroad  than  in  Italy.  Naturally,  many  of  the  successful 
emigrants  have  sent  for  their  families.  Herein  lies  the 
reason  that,  although  as  a  rule  men  only  emigrate  in 
search  of  work,  19  per  cent,  of  the  emigrants  consist  of 
women. 

Let  us  now  see  where  the  bulk  of  Italy’s  emigrants 
have  settled.  Let  us  study  the  natural  current  of  the 
stream.  According  to  carefully  drawn  up  estimates 
published  by  the  Italian  Emigration  Commission,  the 
Italians  living  outside  of  Italy  in  1910  were  distributed 
as  follows : 


In  Northern  and  Eastern  Europe 

5,285 

In  Western  Europe  (France) 

In  Central  Europe  (Germany, 

444,660 

Switzerland,  Austria-Hungary) 

406,000 

In  Southern  Europe 

44,617 

900,562 

North  Africa 

181,027 

South  Africa 

10,892 

191,919 

North  America  . . 

1,801,623 

South  America 

2,638,952 

Central  America  . . 

4,481 

4,445,056 

Asia 

12,500 

Australasia 

7,709 

Total 

5,557,746 

ITALY’S  POSITION  AND  FUTURE 


317 


During  a  few  decades  5,557,746  Italians  have  settled 
abroad,  and  the  great  majority  of  these  will  probably 
not  return.  It  will  be  noticed  that  the  current  of  Italian 
emigration  goes  with  approximately  equal  strength  to 
Southern  and  to  Northern  countries.  The  number  of 
Italians  who  have  settled  in  North  America  and  in  Europe 
is  almost  exactly  as  large  as  that  of  the  men  who  have 
settled  in  South  America  and  in  North  Africa,  where 
the  climate  approximates  that  of  Italy.  It  is  therefore 
obvious  that  the  principal  aim  of  the  emigrant  Italian 
is  to  find  good  work  at  a  good  wage,  and  that  he  does 
not  care  very  much  whether  the  country  in  which  he  works 
resembles  Italy  or  is  comparatively  bleak  and  inhospitable. 

The  fact  that  the  vast  majority  of  Italian  emigrants 
intend  to  leave  Italy  only  for  a  short  time,  that  they  wish 
to  return  as  soon  as  possible  to  the  land  of  their  birth 
and  to  their  families,  is  apparent  not  only  from  the 
phenomenon  that  81  per  cent,  of  the  Italian  emigrants 
are  men,  but  also  from  the  Census  which  was  taken  on 
June  10,  1911.  The  Census  forms  contained  questions 
relating  to  Italians  who  were  living  abroad.  One  of 
these  questions  asked  for  information  regarding  emigrants 
who  were  expected  to  return  to  Italy  during  the  Census 
year.  From  the  classification  of  the  replies  received  it 
appears  that  1,124,003  Italian  emigrants  were  expected 
to  return  to  Italy  in  1911,  according  to  the  information 
supplied  by  their  families.  The  impossibility  of  the  return 
of  1,124,003  emigrants  is  obvious  from  the  fact  that,  ac¬ 
cording  to  a  table  previously  given,  only  about  200,000 
emigrants  return  on  an  average  every  year  from  countries 
overseas.  Of  these  1,124,003  emigrants  whose  return 
was  expected  by  their  families  during  the  second  half 
of  1911,  no  fewer  than  725,644  were  reported  to  be  in 
extra-European  countries. 

Within  a  very  few  years  many  American  States  have 


318 


ITALY’S  POSITION  AND  FUTURE 


been  swamped  by  a  sudden  inrush  of  Italians.  In 
South  America,  where  in  1910  there  were  2,638,952 
Italians,  the  Italian  emigrants  occupy  proportionately 
a  most  important  position.  However,  in  the  United 
States  also  the  proportion  of  Italians  is  exceedingly 
great.  According  to  the  American  Census  of  1910,  there 
were  in  the  United  States  1,343,070  Italians.  The  signi¬ 
ficance  of  that  number  may  be  seen  from  the  fact  that 
there  were  at  the  same  time  only  876,455  English-born 
people  in  the  United  States,  while  England,  Scotland 
and  Wales  combined  accounted  for  1,221,283  people  in 
that  country.  As  the  population  of  Italy  is  approxi¬ 
mately  equal  to  that  of  England  alone,  the  proportion 
of  Italian  people  in  the  United  States  is  50  per  cent, 
greater  than  that  of  the  English  people  living  in  that 
country.  In  New  York  alone  there  were  at  the  time  of 
the  Census  340,770  Italians,  a  larger  number  than  the 
population  of  Palermo. 

An  analysis  of  Italy’s  economic  position  shows  clearly 
that  the  poverty  of  the  Italian  people  is  due,  not  to  their 
ignorance  and  laziness,  as  is  frequently  asserted  by  the 
ill-informed  and  the  superficial,  but  to  the  great  density 
of  Italy’s  population,  to  its  rapid  increase,  and  especially 
to  the  extraordinary  inadequacy  of  the  natural  resources, 
which  impedes  the  development  of  Italy’s  agriculture, 
fishing,  manufacturing  industries  and  trade.  Close  study 
of  economic  Italy  shows  clearly  that  the  Italians  are 
earnest,  intelligent  and  most  industrious  workers,  who 
by  unremitting  toil  and  superhuman  frugality  and  thrift 
have  vastly  improved  their  position,  and  who  deserve 
general  sympathy  and  support  in  their  heroic  struggle 
with  adversity. 

The  full  measure  of  Italy’s  difficulties  is  revealed  by 
the  statistics  of  her  foreign  trade,  which  give  the  follow¬ 
ing  picture : 


ITALY’S  POSITION  AND  FUTURE 


319 


Year. 

Italy's  Imports. 

Italy's  Exports. 

Excess  of  Imports 
over  Exports. 

Lire. 

Lire. 

Lire. 

1895  .. 

1,187,000,000 

1,038,000,000 

149,000,000 

1900  .. 

1,700,000,000 

1,338,000,000 

362,000,000 

1905  .. 

2,016,000,000 

1,705,000,000 

311,000,000 

1910  .. 

3,246,000,000 

2,080,000,000 

1,166,000,000 

1911  .. 

3,389,000,000 

2,204,000,000 

1,185,000,000 

1912  .. 

3,702,000,000 

2,397,000,000 

1,305,000,000 

1913  .. 

3,646,000,000 

2,512,000,000 

1,134,000,000 

Italy’s  foreign  trade  has  two  great  characteristics. 
In  the  first  place,  it  is  quickly  expanding.  In  the  second 
place,  it  shows  a  considerable  excess  of  imports  over 
exports,  and  this  unfavourable  balance  is  continually 
and  very  rapidly  increasing.  Owing  to  the  insufficiency 
of  its  agricultural  soil  and  its  mineral  resources,  etc., 
Italy  is  dependent  upon  foreign  countries,  not  only  for 
many  raw  materials,  but  also  for  a  great  deal  of  her  food, 
especially  wheat.  Italy’s  economic  position  may  briefly 
be  summed  up  as  follows:  She  buys  from  abroad  vast 
quantities  of  indispensable  food  and  of  equally  indispens¬ 
able  raw  materials,  such  as  coal,  cotton,  wool,  iron, 
copper,  etc.,  and  she  pays  for  these  only  in  part  with  her 
exports,  which  consist  very  largely  of  luxuries.  There 
remains  a  very  considerable  adverse  balance  to  be  settled, 
and  she  pays  for  the  great  and  constantly  growing  excess 
of  her  imports,  not,  as  does  the  United  Kingdom,  with 
the  earnings  of  her  shipping  and  the  income  derived  from 
her  foreign  investments,  both  of  which  are  insignificant, 
but  with  the  labour  of  her  emigrants.  As  she  cannot 
export  a  sufficiency  of  goods,  she  is  compelled  to  export 
men  in  order  to  be  able  to  pay  for  her  imports  and  to 
live.  That  is  a  wasteful  and  a  very  painful  proceeding, 
which  is  bound  to  debilitate  the  nation. 

As  Italy  imports  necessities  and  exports  chiefly  luxuries, 


320 


ITALY’S  POSITION  AND  FUTURE 


she  finds  herself  in  an  unfortunate  and  a  very  dangerous 
position.  An  analysis  of  Italy’s  exports  shows  that  these 
consist  principally  of  the  following  goods  according  to  the 
order  of  their  importance :  silk  and  silk  manufactures,  cotton 
manufactures  (largely  luxuries),  wine,  dried  figs,  grapes, 
almonds,  etc.,  cheese,  olive  oil,  oranges,  lemons,  melons, 
tomatoes,  etc.,  eggs,  worked  marble  and  alabaster, 
various  manufactured  luxuries,  such  as  artistic  furniture, 
glassware,  lace,  motor-cars,  etc. 

For  decades  the  nations  of  the  world  will  have  to  save 
in  order  to  pay  for  the  War,  and  will  have  to  restrict  the 
purchase  of  luxuries,  and  especially  of  foreign  luxuries. 
Taxation  will  remain  very  high,  and  imported  luxuries 
will  naturally  be  singled  out  for  particularly  heavy 
taxation.  Hence  Italy’s  exports  of  silks,  wines,  oranges, 
figs,  almonds,  olive  oil,  artistic  furniture,  etc.,  will  prob¬ 
ably  be  crippled.  Unfortunately,  the  Italians  cannot 
turn  from  the  production  of  luxuries  to  that  of  necessities. 
Wheat,  beans,  potatoes,  etc.,  cannot  be  grown  on  the 
sweltering  mountain  terraces  where  vines,  orange-trees, 
etc.,  flourish,  nor  can  the  Italian  industries  easily  change 
from  the  production  of  artistic  manufactures,  which 
require  the  maximum  of  labour  and  the  minimum  of  coal 
and  of  raw  materials,  to  that  of  necessaries  which  require 
the  minimum  of  labour  and  the  maximum  of  raw  material. 

One  of  the  most  important  Italian  resources  consisted 
in  the  stream  of  wealthy  foreign  visitors  who  before  the 
War  left  every  year  hundreds  of  millions  of  lire  in  the 
country.  Among  these  visitors  the  Germans  were  by 
far  the  most  numerous.  Owing  to  the  necessity  of  thrift, 
people  will  for  years  abstain  from  travelling  abroad. 
They  will  take  holidays  in  their  own  country.  The  Ger¬ 
mans  and  Austrians  will  no  doubt  shun  Italy. 

The  economic  position  of  Italy  was  serious  enough  before 
the  War;  it  may  become  still  more  serious  after  its  con- 


ITALY’S  POSITION  AND  FUTURE 


321 


elusion.  Italy’s  imports  will  presumably  be  vastly 
increased  in  price,  for  food  and  raw  materials  will  remain 
dear  for  many  years.  At  the  same  time  her  exports 
will  probably  be  vastly  reduced,  for  the  world  will  for 
many  years  not  be  able  to  afford  purchasing  foreign 
luxuries.  Consequently  Italy’s  unfavourable  trade  balance 
which  was  serious  enough  before  the  War,  may  increase 
at  a  startling,  an  unprecedented  and  almost  an  unbeliev¬ 
able  rate.  It  follows  that  Italy  will  be  able  to  pay  for 
the  necessaries  which  she  has  to  import  only  by  means 
of  a  vastly  increased  export  of  her  citizens  to  foreign 
States,  unless  she  obtains  substantial  relief  from  some 
quarter  or  the  other.  Emigration  from  Italy,  which  was 
colossal  before  the  War,  and  which  beat  all  international 
records,  may  after  the  Peace  assume  gigantic  and  truly 
calamitous  proportions. 

In  1914  and  1915  many  Italian  statesmen,  politicians 
and  writers  were  averse  from  Italy  taking  part  in  the  War 
because  they  recognised  that,  though  exceedingly  rich 
in  genius,  in  energy  and  in  men,  she  is  exceedingly  poor 
in  natural  resources  of  every  kind  by  the  exploitation 
of  which  men  live.  They  recognised  that  the  savings 
which  the  people  had  accumulated  during  decades  by 
their  exertions  and  by  a  superhuman  economy  would 
quickly  be  dissipated,  that  the  national  working  capital 
would  disappear,  that  the  War  might  yield  the  possession 
of  the  Trentino  and  of  Trieste,  but  might  nevertheless 
be  ruinous  to  the  country.  Herein  lay  the  reason  that 
many  Italian  patriots  considered  it  a  grave  mistake  for 
Italy  to  abandon  her  neutrality.  Their  views  are  per¬ 
fectly  understandable. 

Every  Italian  knows,  of  course,  that  the  Italian  people 
are  kept  in  poverty  and  that  they  are  forced  against  their 
will  to  emigrate  in  large  numbers  because  the  country 
lacks  land  for  the  pursuit  of  agriculture,  and  lacks  the 


322 


ITALY’S  POSITION  AND  FUTURE 


raw  materials  necessary  for  the  energetic  development 
of  the  manufacturing  industries,  especially  coal  and  iron. 
The  haunting  thought  and  desire  of  all  Italians  has 
naturally  been  how  to  provide  land  and  raw  material, 
and  particularly  land,  for  the  people.  Hence  many 
Italian  patriots  hoped  to  obtain  by  the  War  not  only  the 
liberation  of  the  politically  enslaved  Italians  in  Austria- 
Hungary,  which  is  a  purely  ideal  aim,  but  they  hoped 
that  the  War  would  at  the  same  time  bring  economic 
freedom  to  the  Italians  in  Italy,  and  enable  them  to  make 
a  living  under  the  Italian  flag.  Therefore  they  desired 
that  the  War  should  yield  to  the  Italian  people  the  elbow- 
room  and  the  natural  resources  which  they  urgently 
need ,  and  as  the  Greek  and  Serbian  territories  are  nearest 
at  hand,  they  turned  their  eyes  not  unnaturally  towards 
them,  although  they  demanded  the  liberation  of  the 
Italians  in  Austria  in  the  name  of  the  principle  of  nation¬ 
alities  and  of  justice. 

If  we  consider  matters  dispassionately,  it  appears  that 
the  victory  of  the  Allies  may  grant  ample  compensation 
to  all  the  great  nations  leagued  against  Germany,  Italy 
alone  excepted.  Russia,  if  she  can  still  be  called  an 
Ally,  the  United  States,  the  British  Empire  and  the  United 
Kingdom  dispose  of  such  gigantic  latent  resources  of 
every  kind  that  their  development  may  pay,  and  may 
more  than  pay,  for  the  War  within  a  few  decades.  The 
acquisition  of  Alsace-Lorraine  will  give  to  France  huge 
deposits  of  potash  and  of  mineral  oil,  and  by  far  the  largest 
iron  deposits  in  Europe.  The  exploitation  of  these  may 
cover  France’s  War  expenditure  and  more.  If  Germany 
should  be  made  to  pay  adequate  indemnities  for  the  damage 
done  by  her  armies,  the  smaller  nations,  which  have 
suffered  most,  would  naturally  have  the  first  call  upon 
them.  Italy,  on  the  other  hand,  who  has  shown  the 
greatest  gallantry  in  throwing  her  sword  into  the  scales 


ITALY’S  POSITION  AND  FUTURE 


323 


when  the  outlook  was  exceedingly  threatening,  might 
suffer  greatly,  for  the  economic  value  of  the  Trentino  and 
of  Trieste  is  only  small. 

The  tables  given  in  th^se  pages  show  that  the  Italians 
who  emigrate  do  not  discriminate  much  between  one 
country  and  the  other ,  that  they  do  not  go  in  the  greatest 
numbers  to  lands  near  by  or  to  countries  where  the  climate 
resembles  that  of  Italy,  but  they  go  to  any  country  where 
work  and  wages  are  plentiful.  Thousands  of  Italians 
go  every  year  as  far  as  the  United  States,  Brazil  and 
Argentina  merely  in  order  to  gather  in  the  harvest  and 
then  return  to  their  native  land. 

Many  Italian  patriots,  seduced  by  the  political  and 
military  advantages  of  propinquity,  have  advocated 
that  Italy  should  endeavour  to  acquire  territories  inhabited 
by  Greeks  and  Serbians,  and  that  she  should  found 
colonies  in  North  Africa,  Asia  Minor,  etc.  Their  wishes 
have,  of  course,  been  supported  enthusiastically  by  Ger¬ 
mans  desirous  of  making  mischief  and  by  pro-Germans 
working  in  Italy.  I  believe  that  those  Italians  who  see  their 
ideal  in  a  Greater  Italy  situated  about  the  Mediterranean 
Sea  are  pursuing  a  mirage.  If  Italy  were  given  the  whole 
of  the  Balkan  Peninsula,  all  North  Africa  and  all  Asia 
Minor,  her  economic  position  might  be  no  better  than 
it  is  at  present.  The  political  ambitions  of  her  idealists 
might  perhaps  be  satisfied,  but  the  country  would  still 
lack  the  two  most  essential  things — land  for  her  agricul¬ 
turists  and  raw  materials  for  her  industries.  Therefore 
her  citizens  would  still  migrate  by  the  million  to  the  two 
Americas  and  to  those  European  countries  where  work 
is  plentiful  and  wages  are  good,  while  the  Mediterranean 
lands  would  make  large  claims  upon  the  Italian  bureau¬ 
cracy  and  army  and  upon  the  tax-payers.  They  might 
prove  a  liability,  not  an  asset.  It  is  worth  noting  that 
in  1910  the  number  of  Italians  in  North  Africa  was 


324 


ITALY’S  POSITION  AND  FUTURE 


as  follows,  according  to  the  Italian  Emigration  Com¬ 
mission  : 


In  Tunis 
In  Algiers 
In  Egypt 
In  Eritrea 


. .  100,000 

..  45,374 

. .  34,926 

2,800 


Total  . . 


183,100 


In  the  same  year  there  were  in  America  4,445,056  Italians, 
and  in  extra-Italian  Europe  900,562  Italians.  After 
all,  emigrants  are  attracted,  not  by  ideal  motives,  but  by 
the  possibility  of  making  a  good  living. 

Italy  requires  elbow-room  and  raw  materials.  She 
requires  the  latter  most  urgently  in  the  difficult  period 
after  the  War.  Her  need  of  raw  materials  and  of  cheap 
oversea  transport  may  comparatively  easily  be  satisfied 
by  arrangements  with  the  Allies,  who  should  furnish 
Italy  for  a  number  of  years  with  coal,  raw  materials, 
etc.,  not  on  competitive,  but  on  preferential  terms. 
They  should  provide  her,  besides,  with  cheap  capital 
for  the  development  of  the  country  and  especially  of 
electric  power.  However,  more  than  this  might,  and  I 
think  should,  be  done  for  her.  Her  gallantry  deserves 
an  adequate  and  a  full  reward,  and  deeds  are  more  valuable 
than  the  most  graceful  expression  of  gratitude.  Hitherto 
territorial  possessions  have  been  the  prize  of  successful 
violence.  We  have  been  told  that  the  present  War 
will  close  the  age  of  conquest  and  open  the  era  of  justice. 
We  have  been  told  that  the  present  War  is  being  fought 
largely  in  order  to  demonstrate  to  Germany,  and  to  other 
nations  which  may  feel  inclined  to  follow  her  example, 
that  violence  does  not  pay,  but  leads  inevitably  to 
punishment.  If  it  is  right  that  the  vile  actions  of  a  nation 
should  be  visited  with  punishment  at  the  hands  of  the 
other  nations,  it  should  logically  follow  that  the  good 


ITALY’S  POSITION  AND  FUTURE 


325 


actions  of  a  nation  should  be  suitably  recompensed, 
that  virtue  should  no  longer  be  its  own  reward.  I  would 
therefore  suggest,  and  I  would  emphatically  state  that 
I  am  alone  responsible  for  the  suggestion,  which  has  not 
been  inspired  or  advised  by  anyone,  that  at  the  end  of 
the  War  Italy’s  Allies  should  richly  endow  that  country 
for  her  bravery,  her  gallantry  and  her  sufferings,  and 
should  guarantee  her  future  greatness  by  endowing  her 
out  of  their  superabundance  with  the  territories  which 
she  needs,  with  a  colonial  empire.  The  ideal  in  my 
mind  is  that  after  the  conclusion  of  the  War  the  Allied 
diplomats  should  settle  with  Italy  and  hand  over  to  her 
as  a  free  gift,  not  territories  of  little  value  which  can 
easily  be  spared  and  which  they  might  wish  to  get  rid  of, 
but  that  Italy  should  be  given  those  territories  which 
she  most  desires  and  which  at  the  same  time  can  be  ceded 
to  her.  The  United  States  and  the  British  Empire  can 
richly  endow  Italy  with  territories  which  will  furnish 
that  country  with  raw  materials  of  every  kind  and  with 
agricultural  lands  upon  which  in  the  course  of  years  a 
Greater  Italy  may  arise. 

Millions  of  Italians  live  abroad  and  further  millions 
may  follow  them.  The  great  current  of  Italian  emigrants 
could  scarcely  be  directed  to  North  Africa,  supposing 
that  all  North  Africa  belonged  to  Italy,  because  the 
country  lacks  the  necessary  resources.  Besides,  there 
is  a  very  large  native  population  already  in  possession. 
If  Italy  should  receive  from  the  Allies  rich  and  empty 
territories  she  may  be  able  not  only  to  direct  the  stream 
of  her  future  emigrants  to  her  new  possessions,  but  her 
sons  domiciled  in  the  two  Americas  and  elsewhere  may 
in  course  of  time  go  to  Italy’s  possessions,  where  they  can 
live  among  men  of  their  own  race  and  where  there  are  no 
difficulties  with  a  large  native  population. 

There  is,  unfortunately,  a  considerable  amount  of 

22 


326 


ITALY’S  POSITION  AND  FUTURE 


prejudice  against  Italian  labour.  British  colonials  and 
American  labour  leaders  may  object  to  the  creation  of 
Italian  colonies  in  their  neighbourhood.  A  great  deal 
of  the  prejudice  against  Italian  labour  is  due  to  ignorance. 
Many  working-men  believe  that  the  Italians  are  a  nation 
of  shirkers;  that  Italians  who  leave  their  own  country 
are  mostly  waiters,  organ-grinders,  hairdressers,  ice¬ 
cream  vendors,  etc. ;  that  they  shun  honest  labour. 
Men  who  employ  these  arguments  should  be  told  that 
Italians  have  done  the  hardest  and  most  exhaustive 
work  everywhere;  that  they  have  constructed  innu¬ 
merable  tunnels,  railway  cuttings,  canals,  etc. ;  that  they 
have  been  the  pioneers  of  civilisation  on  all  continents. 
It  is  true  that  the  Italians  frequently  work  for  less  money 
than  do  the  native  workers,  but  they  do  this,  not  from  a 
desire  to  underbid  native  labour,  but  from  ignorance  of 
the  language  and  of  the  customs  of  the  land  where  they 
work.  Foreign  contractors  have  found  it  to  their  advan¬ 
tage  to  arrange  with  Italian  agents,  with  padrones,  for 
the  supply  of  Italian  labour  below  current  rates.  In 
most  cases,  not  the  Italian  workmen,  but  the  native 
contractors  are  to  blame  for  the  lowness  of  the  wages 
paid  to  the  Italian  workers. 

The  grant  of  a  colonial  empire  to  Italy  would  vastly 
benefit  the  Italian  people  and  would  bind  them  with 
bonds  of  affection  to  the  Allies  for  decades  and  perhaps 
for  all  time.  At  the  same  time,  the  British  and  American 
colonists  would  no  doubt  also  be  greatly  benefited  by  close 
contact  with  the  Italian  people.  They  can  learn  a  great 
deal  from  the  Italian  workers  of  every  class.  Many 
industries  at  present  monopolised  by  them  will  be  learned 
by  Englishmen  and  Americans.  Wine  may  replace 
spirits  and  beer  as  a  national  drink  in  the  countries  near 
which  they  have  settled.  After  all,  it  must  not  be  for¬ 
gotten  that  the  Italians  were  not  so  very  long  ago  the 


ITALY'S  POSITION  AND  FUTURE 


327 


foremost  nation  in  the  world,  and  that  they  temporarily 
declined  when,  in  the  middle  of  the  sixteenth  century, 
they  fell  under  the  domination,  first  of  the  Spanish  and 
then  of  the  Austrian  Habsburgs,  who  oppressed  and 
ruined  the  country. 

Intellectually  and  artistically  the  Italians  were  fore¬ 
most  in  the  world  until  they  fell  under  Habsburg  rule. 
Columbus  and  Toscanelli,  who  inspired  him;  the  Cabots, 
who  are  often  believed  to  be  Englishmen ;  Amerigo 
Vespucci  and  Marco  Polo,  were  Italians,  and  so  were 
Carpini,  who  explored  Turkestan  in  1245-1247,  and 
Niccolo  de’  Conti,  who  first  explored  India.  The  Cape 
Verde  Islands  and  the  Senegal  and  Gambia  were  not 
discovered  by  Portuguese  explorers  in  the  time  of  Henry 
the  Navigator,  as  is  widely  believed,  but  by  an  Italian, 
Cada  Mosto,  who  conducted  a  Portuguese  expedition 
exactly  as  Columbus  conducted  a  Spanish  expedition. 
Italy  has  furnished  the  world  with  some  of  the  greatest 
scientists,  such  as  Thomas  of  Aquino,  Giordano  Bruno, 
Leonardo  da  Vinci,  Politian,  Pico  della  Mirandola,  Lorenzo 
Valla,  Torricelli,  etc.  Modern  electricity  owes  a  great 
deal  to  the  great  Italians,  from  Volta  and  Galvani  to 
Marconi.  Among  the  greatest  of  the  world’s  reformers 
were  men  like  Arnaudo  da  Brescia,  Marsiglio  of  Padua, 
Cola  di  Rienzo  and  Savonarola  who  inspired  Luther  and 
the  great  political  reformers.  Italian  thinkers  have 
mightily  advanced  philosophy,  astronomy,  the  mathe¬ 
matical  sciences,  geography,  municipal  and  international 
law,  political  economy,  etc.  Modern  art  is  a  gift  of  the 
Italians.  Italy  has  given  us  Dante,  Petrarca,  Boccaccio, 
Ariosto,  Tasso,  Cimabue,  Giotto,  Michel  Angelo,  Leonardo 
da  Vinci,  Raphael,  Donatello,  Correggio,  Botticelli, 
Bramante  and  innumerable  other  masters.  She  is  the 
mother  of  modern  music.  The  scientists,  thinkers  and 
artists  of  modern  Italy  are  worthy  sons  of  their  great 


328 


ITALY'S  POSITION  AND  FUTURE 


ancestors.  Prosperity,  Science  and  Art  are  apt  to  go 
hand  in  hand.  During  the  Cinquecento  the  Italians  were 
foremost  not  only  in  all  the  sciences  and  all  the  arts,  but 
in  all  the  industries  and  in  commerce  as  well.  The  great 
Italian  towns  were  the  wealthiest  towns  in  the  world. 
The  creation  of  a  Greater  Italy,  as  outlined  in  these 
pages,  may  bring  about  another  awakening  of  Italian 
genius,  another  Cinquecento.  If  the  ideas  expressed  in 
these  pages  should  recommend  themselves  to  the  friends 
of  Italy  in  England,  France  and  the  United  States,  the 
societies  friendly  to  Italy  domiciled  in  the  three  countries 
should  take  up  the  programme  sketched  in  this  chapter 
and  urge  its  realisation  upon  the  various  Governments. 


CHAPTER  XIII 


CAN  GERMANY  PAY  AN  INDEMNITY  ?— HER  NATURAL 

WEALTH* 

Before  the  outbreak  of  the  present  War  most  English¬ 
men  looked  at  German  economic  conditions  through 
strongly  coloured  party-political  spectacles.  Tariff  Re¬ 
formers  loudly  asserted  that  Germany  was  enormously 
wealthy  owing  to  her  tariff,  while  Free  Traders  equally 
stoutly  maintained  that  Germany  was  wretchedly  poor. 
In  the*  summer  of  1914,  at  a  moment  when  the  pre-war 
tension  was  greatest,  a  very  distinguished  Free  Trader 
assured  me  that  peace  would  certainly  be  maintained, 
that  Germany’s  financial  position  was  very  unfavourable, 
that  she  suffered  from  chronic  deficits,  that  her  last  loan 
had  been  a  failure,  that  she  could  not  afford  to  go  to  war. 
When  I  expressed  doubt  at  the  correctness  of  his  views* 
he  replied  with  indignation:  “Of  course,  you  are  a  Tariff 
Reformer  !” 

Four  years  of  war,  during  which  Germany  has  financed 
her  impecunious  allies  and  has  spent  untold  millions 
among  the  neutral  States,  have  proved  even  to  the  blindest 
that  Germany,  who  was  lamentably  poor  a  few  decades 
ago,  who,  in  1870,  after  her  first  victories  over  France, 
raised  with  difficulty  a  loan  of  a  few  million  pounds  at 
10  per  cent.,  only  half  of  which  was  subscribed  for,  has 
suddenly  become  exceedingly  wealthy.  British  party 
strife  and  party-political  prejudice  have  shrunk  into  the 

*  From  The  Fortnightly  Review,  June,  1918. 

329 


330  GERMANY  AND  INDEMNITY  QUESTION 


background.  Hence  the  moment  seems  favourable  for 
making  a  brief  and  impartial  inquiry  into  the  nature  and 
causes  of  the  wealth  of  Germany.  Such  an  investigation 
seems  particularly  timely,  because  it  is  frequently,  but 
rather  rashly,  asserted,  and  very  widely  believed,  that 
Germany  will  be  ruined  if  she  should  lose  the  War,  that 
no  indemnity,  and  certainly  no  adequate  indemnity,  can 
be  expected  from  her  even  if  the  Allies  should  gain  a 
complete  victory. 

In  a  democracy  such  as  Great  Britain  people  are  un¬ 
fortunately  apt  to  subordinate  facts  to  their  party- 
political  or  their  personal  views  and  aspirations.  While 
convinced  Tariff  Reformers  ascribe  Germany’s  vast 
prosperity  chiefly,  if  not  exclusively,  to  Protection, 
enthusiastic  Free  Traders,  who  at  last  have  reluctantly 
begun  to  admit  Germany’s  wealth,  ascribe  it  to  the  better 
education  of  the  German  people  and  to  their  industry 
and  frugality.  Opponents  of  amateur  government  believe 
that  Germany’s  economic  progress  is  due  to  government 
by  experts,  Socialists  assert  that  State  Socialism  has 
enriched  the  country,  while  many  advocates  of  inland 
transport  reform  see  in  Germany’s  excellent  railways  and 
canals  the  principal  factor  of  her  wonderful  industrial 
development. 

As  a  rule,  great  economic  phenomena  are  due,  not  to  a 
single  cause,  but  to  a  number  of  causes.  Expert  govern¬ 
ment,  an  able,  well-organised  and  conscientious  adminis¬ 
tration,  good  railways  and  canals,  a  fiscal  policy  designed, 
not  for  vote-catching  purposes,  but  for  purely  economic 
ends,  and  a  good  education,  have  all  powerfully  con¬ 
tributed  in  making  Germany  efficient  and  prosperous. 
However,  wealth  depends  not  merely  on  the  exertions  of 
men.  Wealth  is  created  by  the  exploitation  of  the 
resources  of  Nature  by  men.  An  industrious,  ambitious, 
well- trained,  well-governed  and  well-directed  nation 


GERMANY  AND  INDEMNITY  QUESTION  331 


cannot  hope  to  accumulate  great  wealth  unless  it  possesses 
great  natural  resources.  Greenland  would  remain  poor 
even  if  all  the  Eskimos  were  Carnegies  and  Edisons. 

It  is  frequently  asserted  by  those  who  are  insufficiently 
acquainted  with  German  affairs,  and  by  those  who  wish 
to  ascribe  Germany’s  phenomenal  economic  success  to 
some  single  cause,  that  Germany  is  naturally  an  ex¬ 
ceedingly  poor  country;  that  she  owes  her  vast  wealth 
almost  exclusively  to  the  exertions  of  her  people  and  to 
the  ability  of  her  rulers.  In  reality  Germany  is  endowed 
with  very  great  and  exceedingly  valuable  natural  re¬ 
sources.  Among  these  the  following  are  particularly 
important.  Germany  possesses — 

(1)  By  far  the  greatest  mineral  resources  in  Europe, 
especially  coal,  potash  and  iron  ore; 

(2)  A  geographical  configuration  most  favourable  to 
the  development  of  agriculture  and  industry ; 

(3)  An  unrivalled  system  of  natural  waterways  which 
opens  up  the  country  in  all  directions; 

(4)  An  invaluable  strategical  position  in  the  centre  of 
the  Continent,  which  is  as  helpful  for  commercial  con¬ 
quest  as  for  military  aggression. 

As  the  study  of  Germany’s  natural  resources  has 
hitherto  been  much  neglected  by  those  who  have  dealt 
with  German  affairs,  and  especially  by  the  numerous 
writers  who  have  ascribed  Germany’s  success  either  to 
the  qualities  of  the  people  and  of  their  rulers  or  to  her 
economic  policy  in  the  wider  or  the  narrower  sense,  I 
intend  to  deal  in  these  pages  with  Germany’s  natural 
resources  in  the  first  place. 

The  great  characteristic  of  modern  industrial  produc¬ 
tion  is  that  it  is  carried  on  by  labour-saving  machinery, 
whereby  the  productivity  of  a  single  worker  can  be  in¬ 
creased  a  hundredfold  and  a  thousandfold.  A  skilled 
smith  can  as  easily  use  a  hundred-ton  steam-hammer  as 


332  GERMANY  AND  INDEMNITY  QUESTION 


a  light  sledge-hammer.  A  skilled  weaver  can  as  easily 
attend  to  twenty  automatic  power-looms  which  work 
with  incredible  rapidity  as  to  a  single  sluggish  hand-loom. 

_  Modern  industry  is  based  on  the  most  lavish  use  of  power 
for  driving  machinery.  Machines  are  driven  either  by 
steam  or  by  electricity.  Electric  power  can  be  generated 
either  from  coal  or  from  waterfalls.  As  there  are  com¬ 
paratively  few  waterfalls  in  Germany,  except  in  the 
extreme  South,  coal  furnishes,  and  will  continue  to 
furnish,  Germany,  and  most  other  European  States  as 
well,  with  the  prime  motive  force,  which,  of  course,  may 
be  converted  into  electric  power.  Not  only  the  bulk  of 
the  industrial  machinery,  but  the  bulk  of  the  machinery 
used  in  mines  and  on  railways,  steamships,  etc.,  depends 
upon  coal  or  upon  coal-generated  electricity.  It  is  there¬ 
fore  clear  that  coal  is  the  dominating  and  the  determining 
factor  in  modern  industry  and  in  modern  commerce  and 
transport.  All  three  require  gigantic  quantities  of  coal. 

Germany  has  by  far  the  greatest  store  of  coal  in  Europe. 
Her  relative  position  as  an  owner  of  coal  may  be  seen 
from  the  following  features,  which  are  taken  from  the 
valuable  Report,  “  Coal  Resources  of  the  World,”  which 
was  placed  before  the  International  Geological  Congress 
at  Ottawa  in  1913: 


Coal  Resources  of  Europe. 


Germany  . . 

Great  Britain  and  Ireland 
Russia 

Austria-Hungary 

France 

Belgium 

Spain 

Spitzbergen  . 

Holland 
Balkan  States 
Italy 

Sweden,  Denmark  and  Portugal 


Tons. 

423,356,000,000 

189,535,000,000 

60,106,000,000 

59,269,000,000 

17,583,000,000 

11,000,000,000 

8,768,000,000 

8,750,000,000 

4,402,000,000 

996,000,000 

243,000,000 

184,000,000 


Total .  784,192,000,000 


GERMANY  AND  INDEMNITY  QUESTION  333 


It  will  be  noticed  that,  within  her  frontiers  of  1914, 
Germany  possesses  more  than  one-half  of  the  coal  of  all 
Europe;  that  she  has  more  than  twice  as  much  coal  as 
the  United  Kingdom,  more  than  seven  times  as  much  coal 
as  European  Russia,  more  than  twenty-four  times  as 
much  coal  as  France;  that  she  has  more  than  twice  as 
much  coal  as  all  the  other  States  of  the  European  Con¬ 
tinent  combined.  Germany  is  supreme  in  Europe  in  the 
most  important  of  all  minerals.  It  need  scarcely  be 
explained  that  supremacy  in  coal,  in  power,  is  a  tre¬ 
mendous  advantage  to  a  modern  industrial  and  com¬ 
mercial  State. 

Germany’s  coal  is  an  asset  of  truly  gigantic  value.  At 
the  very  low  average  price  of  10s.  per  ton  at  the  pit’s 
mouth — a  price  which  is  bound  to  increase  greatly  in 
course  of  time — her  store  of  coal  alone  represents  a 
capital  of  £211,678,000,000,  a  sum  which  is  thirty  times 
as  large  as  England’s  estimated  War  expenditure  up  to 
March  31st,  1919,  and  about  fourteen  times  as  large  as 
the  National  Wealth  of  the  United  Kingdom  w*as  supposed 
to  be  in  1913.  In  view  of  her  colossal  wealth  in  coal  it 
is,  of  course,  ridiculous  to  say,  as  many  people  do,  that 
Germany  is  naturally  a  very  poor  country,  and  that  she 
cannot  pay  a  heavy  indemnity  in  case  she  should  be 
defeated. 

The  value  of  coal  depends  upon  its  quality  and  upon 
the  position  and  the  greater  or  lesser  exploitability  of  the 
coalfields.  Let  us,  therefore,  study  Germany’s  wealth 
in  coal  a  little  more  closely. 

Germany  is  particularly  rich  in  bituminous  coal,  which 
yields  an  abundance  of  by-products  such  as  gas,  tar, 
pitch,  oil,  ammonia,  explosives,  dyes,  drugs,  etc.,  which 
in  the  aggregate  are  far  more  valuable  than  the  coal  from 
which  they  are  obtained.  Germany’s  coal-measures  are 
on  the  whole  easily  exploitable.  Her  most  important 


334  GERMANY  AND  INDEMNITY  QUESTION 


coalfields  are  three:  The  Rhenish-Westphalian  coalfield, 
situated  on  the  River  Ruhr  about  the  town  of  Dortmund ; 
the  great  Silesian  coalfield,  in  the  south-eastern  corner  of 
Silesia,  close  to  the  Austrian  and  Russian  borders;  the 
Saar  coalfield,  about  the  town  of  Saarbriicken,  close  to 
the  frontier  of  Lorraine.  An  authoritative  description 
of  the  principal  German  coalfields  and  a  reliable  estimate 
of  Germany’s  wealth  in  coal  were  furnished  to  the  Inter¬ 
national  Geological  Congress  at  Ottawa  by  leading 
German  experts  and  were  reprinted  in  the  Report  men¬ 
tioned.  I  have  extracted  from  that  document  the  most 
important  passages.  The  estimate  of  Germany’s  coal 
resources  was  drawn  up  with  the  greatest  caution,  and 
it  erred,  apparently  very  considerably,  on  the  side  of 
moderation,  as  coal  estimates  frequently  do.  The 
Report  of  the  German  experts  stated: 

According  to  general  expert  opinion,  coal-mining  is 
for  decades  not  practicable  in  Germany  at  a  greater  depth 
than  1,500  metres.  .  .  .  The  figures  given  in  the  follow¬ 
ing  relate  only  to  the  quantities  of  coal  which  are  actually 
exploitable  under  present  conditions.  Therefore,  layers 
which  measure  less  than  30  centimetres  (12  inches)  have 
been  excluded.  It  should  also  be  pointed  out  that  the 
store  of  lignite  possessed  by  Germ, any  is  considerably  larger 
than  indicated  by  the  figures  given.  .  .  . 

The  relative  importance  of  the  Westphalian  coalfield 
increases  constantly  the  lower  one  goes.  Down  to  the 
thousand- metre  depth  it  contains  only  about  one-third 
(30  to  32  per  cent.)  of  Germany’s  coal.  Between  1,500 
metres  and  2,000  metres  it  contains  more  than  twro-thirds, 
exactly  70  per  cent.,  of  Germany’s  coal.  Altogether, 
down  to  a  depth  of  2,000  metres  it  contains  a  little  more 
than  one-half  (from  50  to  52  per  cent.)  of  Germany’s 
coal. 

While  the  relative  importance  of  the  Westphalian 
coalfield  increases  at  depth,  that  of  the  Silesian  coalfield 
diminishes  the  lower  one  goes.  Down  to  1,000  metres 
it  contains  about  60  per  cent,  of  Germany’s  coal,  but 


GERMANY  AND  INDEMNITY  QUESTION  335 


down  to  2,000  metres  it  contains  only  from  39-5  per  cent, 
to  40  per  cent,  of  the  nation’s  fuel.  .  .  . 

The  coalfield  third  in  importance  is  that  on  the  River 
Saar.  Down  to  the  depth  of  1,000  metres  it  contains 
7*87  per  cent.,  and  down  to  2,000  metres  5-7  per  cent., 
of  Germany’s  coal. 


The  Report  sums  up  Germany’s  coal  resources  as 
follows,  according  to  the  depth  at  which  the  mineral 
is  found : 

Down  to  1,200  metres  . .  194,537,000,000  tons  =47*45  per  cent. 
From  1,200  to  1,500  metres  77,447,000,000  tons  =  18-89  ,, 


Total  ..  ..  271,984,000,000  tons  =  66-34 

From  1,500  to  2,000  metres  137,982,000,000  tons  =33*66 


Grand  Total  ..  409,966,000,000  tons  =  100-00  ,, 
Lignite  . .  . .  13,390,000,000  tons 

Total  coal  and  lignite  . .  423,356,000,000  tons 


The  Rhenish- Westphalian  coalfield  is  particularly 
interesting  for  two  reasons:  Firstly,  because  it  is  the 
largest,  the  most  intensively  exploited,  and  therefore 
the  most  important,  German  coalfield;  secondly,  because 
it  is  situated  within  easy  reach  of  France  and  Belgium. 
The  relative  importance  of  the  Rhenish-Westphalian 
coalfield  as  an  active  coal-producer  may  be  seen  from  the 
following  figures: 


German  Coal  Production  in  1910. 


In  the  Rhenish-Westphalian  district 
In  the  South  Silesian  district 
In  the  Saar  district 
In  all  other  districts  . . 


Tons. 

89,318,949 

34,229,360 

13,638,881 

13,885,926 


Total  .  151,073,116 


It  will  be  noticed  that  in  1910  the  Rhenish-Westphalian 
coalfield  furnished  60  per  cent,  of  Germany’s  coal  output. 


336  GERMANY  AND  INDEMNITY  QUESTION 


In  addition,  it  provided  90  per  cent,  of  Germany’s  coke 
(which  is  largely  used  for  iron-smelting),  75  per  cent, 
of  Germany’s  coal-tar,  75  per  cent,  of  Germany’s  benzol, 
and  85  per  cent,  of  Germany’s  sulphate  of  ammonia, 
which  is  exceedingly  valuable  as  a  fertiliser  and  for 
chemical  purposes. 

The  Rhenish-Westphalian  coalfield  has  forty-six  coal 
seams  more  than  12  inches  thick  and  which  in  the  aggre¬ 
gate  are  57  metres  thick.  Altogether  the  field  contains 
ninety- two  seams,  which  in  the  aggregate  are  79-6  metres 
thick. 

The  Rhenish-Westphalian  coalfield  is  situated  in  and 
about  the  valley  of  the  River  Ruhr  and  lies  at  a  right 
angle  to  the  Rhine.  The  coal  slopes  in  a  north-westerly 
direction  to  a  considerable  distance.  Coal  occurs  not 
only  up  to  the  German-Dutch  frontier,  but  even  beyond 
it,  and  is  being  mined  in  Holland.  The  coalfield  may  be 
divided  into  three  zones:  a  zone  in  the  south,  where 
pits  have  been  sunk  into  the  coal;  a  zone  farther  north, 
which  has  been  explored  by  means  of  bore-holes ;  and  a 
third  zone  still  farther  north,  up  to  the  Dutch  frontier, 
which  has  not  yet  been  fully  explored. 

The  fact  that  the  Report  of  the  German  experts  prob¬ 
ably  seriously  understates  the  quantity  of  coal  available 
may  be  seen  from  the  following  statement  of  theirs : 

The  result  of  the  calculations  of  coal  available  has  been 
made  on  a  conservative  basis.  For  loss  of  coal  in  mining 
27  per  cent,  of  the  coal  actually  available  has  been 
deducted. 

The  Report  continues : 

We  have  in  the  Rhenish-Westphalian  pit  zone,  which 
extends  to  1,532  square  kilometres,  down  to  a  depth  of 
1,500  metres,  31,900,000,000  tons  of  coal,  and  down  to 
2,000  metres,  37,500,000,000  tons.  In  the  bore-hole 


GERMANY  AND  INDEMNITY  QUESTION  337 


zone  of  1,728  square  kilometres  we  have  26,900,000,000 
tons  of  coal  to  a  depth  of  1,500  metres,  and  44,700,000,000 
tons  to  a  depth  of  2,000  metres.  Within  the  unopened 
zone  of  2,910  square  kilometres  there  are  17,600,000,000 
tons  down  to  1,500  metres,  and  61,600,000,000  tons 
down  to  2,000  metres. 

At  the  present  rate  of  exploitation,  which  comes  to 
be  100,000,000  tons  per  annum,  the  store  of  coal  absolutely 
worth  extracting  situated  within  the  pit  zone  would 
suffice  for  319  years  down  to  the  depth  of  1,500  metres, 
and  for  375  years  down  to  2,000  metres.  The  coal 
absolutely  worth  extracting  within  the  bore-hole  zone 
would  suffice  for  an  additional  269  years  down  to  1,500 
metres,  and  for  447  years  down  to  2,000  metres.  The 
workable  coal  within  the  unopened  zone  would  suffice 
for  a  further  176  years  down  to  1,500  metres,  and  for 
616  years  down  to  2,000  metres.  In  all  three  zones 
combined,  which  together  extend  to  6,170  square  kilo¬ 
metres,  there  are,  down  to  the  depth  of  1,500  metres, 
76,400,000,000  tons  of  coal  absolutely  worth  extracting, 
which,  at  the  present  rate  of  exploitation,  would  suffice 
for  764  years,  while  the  coal  absolutely  worth  obtaining 
down  to  2,000  metres  would  amount  to  143,800,000,000 
tons,  and  would  suffice  for  1,438  years. 

The  estimate  given  leaves  out  of  account  seams  measur¬ 
ing  less  than  12  inches  across.  If  these  were  included, 
the  coal  would  suffice  for  2,136  years  at  the  present  rate 
of  exploitation.  According  to  the  Report  quoted,  the 
quantity  of  coal  contained  in  the  Rhenish-Westphalian 
field  is  classified  as  follows : 


Actual  Reserves. 


Seams  more  than  12  Inches  thick. 


All  Seams. 


Up  to  1,000  metres 
1,000-1,200  metres 
1,200-1,500  metres 
1,500-2,000  metres 


Tons. 

22,708,000,000 

5,306,000,000 

5,808,000,000 

5,628,000,000 


Tons. 

32,336,000,000 

7,145,000,000 

8,063,000,000 

8,800,000,000 


Total 


•  « 


. .  39,450,000,000 


56,344,000,000 


338  GERMANY  AND  INDEMNITY  QUESTION 


Probable  Keserves. 

8 earns  more  than  12  Inches  thick. 

All  Seams. 

Tons. 

Tons. 

Up  to  1,000  metres 

..  7,708,000,000 

12,756,000,000 

1,000-1,200  metres 

. .  8,745,000,000 

13,322,000,000 

1,200-1,500  metres 

. .  10,455,000,000 

16,943,000,000 

1,500-2,000  metres 

..  17,788,000,000 

25,701,000,000 

Total  . . 

. .  44,696,000,000 

68,722,000,000 

Possible  Keserves. 

Tons. 

Tons. 

1,200-1,500  metres  . 

..  17,600,000,000 

26,500,000,000 

1,500-2,000  metres  . 

. .  44,000,000,000 

62,000,000,000 

Total 

. .  61,600,000,000 

88,500,000,000 

Grand  Total 

. .  145,746,000,000 

213,566,000,000 

I  would  draw  attention  to  the  fact  that  the  Rhenish- 
Westphalian  coalfield  alone  contains  considerably  more 
coal  than  the  whole  of  the  United  Kingdom,  and  that  the 
coal  in  that  district  represents  a  value  of  £106,783,000,000 
at  the  low  average  price  of  10s.  per  ton  at  the  pit’s  mouth. 
That  sum  is  seven  times  as  large  as  the  so-called  national 
wealth  of  the  United  Kingdom  in  1913. 

We  live  in  the  age  of  iron.  While  coal  is  the  principal 
source  of  power  industrially  applied,  iron  is  the  most 
important  ingredient  of  industrial  manufacture  and  of 
transport.  Germany  is  exceedingly  rich,  not  only  in 
coal,  but  in  iron  ore  as  well.  The  wealth  of  a  country 
in  iron  ore  depends,  of  course,  upon  the  quantity  of 
metallic  iron  which  is  contained  in  the  ore.  Germany’s 
relative  position  as  an  owner  of  iron  ore,  or  rather  of 
metallic  iron,  may  be  seen  from  the  following  figures, 
which  are  taken  from  the  Report,  “  Iron-Ore  Resources 


GERMANY  AND  INDEMNITY  QUESTION  339 


of  the  World,”  which  was  placed  before  the  International 
Geological  Congress  at  Stockholm  in  1910: 

Resources  of  Metallic  Iron  contained  in  Iron  Ore. 

Iron  Reserves  of  Europe. 


Actual  Resources. 

Potential  Reserves 

Tons. 

Tons. 

Germany 

•  • 

. .  1,270,000,000 

Considerable. 

France 

•  • 

..  1,140,000,000 

Considerable. 

Sweden 

•  • 

740,000,000 

105,000,000 

United  Kingdom 

455,000,000 

10,830,000,000 

Russia 

•  • 

387,200,000 

424,700,000 

Spain 

•  • 

349,000,000 

Considerable. 

Norway 

•  • 

124,000,000 

525,000,000 

Austria 

•  • 

90,400,000 

97,000,000 

Luxemburg 

•  • 

90,000,000 

<? 

Greece 

•  • 

45,000,000 

t 

Belgium 

•  • 

25,000,000 

t 

Hungary 

•  • 

13,100,000 

34,100,000 

Italy  . . 

•  • 

3,300,000 

1,000,000 

Finland 

•  • 

* 

16,000,000 

Bosnia  and 

Herzego- 

vina 

•  • 

% 

•  •  • 

11,300,000 

Bulgaria 

•  • 

•  •  • 

700,000 

Switzerland 

•  • 

800,000 

800,000 

Portugal 

•  • 

? 

39,000,000 

Total 

•  • 

. .  4,732,800,000 

12,084,600,000 

It  will  be  noticed  that,  as  far  as  actual  reserves  are 
concerned — it  would  be  rash  to  treat  potential  reserves 
as  if  they  were  actually  available — Germany  is  the  largest 
owner  of  iron  ore  in  Europe,  that  she  possesses  within 
her  frontiers  of  1914  three  times  as  much  iron  as  the 
United  Kingdom. 

Germany  has  a  number  of  iron-ore  fields.  These 
contain,  according  to  information  placed  by  eminent 
German  experts  before  the  Stockholm  Congress,  the 
following  quantities  of  ore: 


340  GERMANY  AND  INDEMNITY  QUESTION 


Available  in 
the  First 
Place. 

Lahn  and  Dill  dis- 

Tons. 

trict 

K  ellerwald  -  S  auer- 

166,000,000 

land 

4,000,000 

Siegerland 

Other  Rhenish 

100,300,000 

mountains 

Bentheim-Otten- 

8,100,000 

stein  . . 

— 

Teutoburger  Wald 
Ilsede  and  Salz- 

20,500,000 

gitter  . . 

248,000,000 

Harz  Mountains. . 

20,500,000 

Thuringia 

Minette  of  North- 

51,900,000 

West  Germany 

20,001,000 

Lower  Hesse 
Spessart  Moun- 

600,000 

tains  . . 

3,500,000 

Silesia 

North  and  Middle 

600,000 

Germany 

10,000,000 

Wurttemberg 

10,000,000 

Baden 

— 

Bavaria  . . 

31,000,000 

Hesse 

Lorraine -Luxem- 

15,000,000 

burg  . . 

2,130,000,000 

Total 

2,840,000,000 

Available  in 
the  Second 
Place. 

Probable 

Reserves. 

Tons. 

92,250,000 

Considerable 

15,400,000 

Moderate 

Moderate 

11,500,000 

Moderate 

15,000,000 

23,500,000 

Considerable 

Moderate 

30,000,000 

24,500,000 

52,300,000 

Very  Considerable 
Moderate 
Considerable 

25,000,000 

1,000,000 

Considerable 

Moderate 

17,250,000 

Moderate 

Moderate 

10,000,000 

100,000,000 

150,000,000 

Moderate 

Very  Considerable 
Considerable 
Very  Considerable 
Considerable 

500,000,000 

Very  Considerable 

1,067,700,000 

Very  Considerable 

As  Luxemburg  forms  part  of  the  German  Customs 
Union,  the  Luxemburg  ores  have  been  included  in  the 
list.  The  Grand  Duchy  has  about  300,000,000  tons  of 
available  iron  ore. 

The  figures  given  show  that  in  Lorraine-Luxemburg, 
close  to  the  French  frontier,  are  found  three-fourths  of 
those  German  iron  ores  which  are  described  as  “  available 
in  the  first  place,”  and  one-half  of  those  ores  which  are 


GERMANY  AND  INDEMNITY  QUESTION  341 


described  as  “  available  in  the  second  place.”  The 
eighteen  other  iron-ore  fields  enumerated  possess  indivi¬ 
dually  only  small  quantities  of  ore,  and  I  would  particu¬ 
larly  point  out  that  whereas  the  Lorraine-Luxemburg 
district  possesses  the  bulk  of  the  ore  available  in  the  first 
place,  the  eighteen  other  districts  excel  in  ores  which  are 
available  only  in  the  second  place,  which,  in  other  words, 
are  commercially  of  inferior  value. 

Germany  possesses  in  round  figures  4,000,000,000  tons 
of  iron  ore  actually  in  sight.  In  addition  to  that  vast 
quantity  she  has,  according  to  the  expert  information 
supplied  in  the  table,  very  considerable  reserves,  for  which, 
however,  accurate  estimates  cannot  as  yet  be  given.  If 
we  assume  that  Germany’s  iron  ore  is  on  an  average 
worth  5s.  per  ton — which  seems  a  reasonable  figure,  for 
its  price  is  likely  to  increase — her  store  of  iron  ore  actually 
in  sight  is  worth  about  £1,000,000,000.  It  is  therefore 
a  considerable  asset,  although  its  value  is  small  if  com¬ 
pared  with  the  truly  gigantic  sum  represented  by  the 
value  of  Germany’s  coal.  At  the  rate  of  5s.  per  ton, 
the  Lorraine-Luxemburg  iron  ore  alone  would  be  worth 
£750,000,000. 

As  the  Lorraine-Luxemburg  ores  are  more  easily 
accessible  and  more  valuable  than  the  other  German  ores, 
it  is  only  natural  that  the  Lorraine  orefields  have  become 
the  principal  source  of  Germany’s  domestic  ore- supply. 
In  1910  Germany’s  gigantic  iron  industries  used  38,526,454 
tons  of  ore,  which  came  from  the  following  quarters : 

Iron  Ore  Used  in  Germany  in  1910. 

Domestic  Ore. 

From  Alsace-Lorraine  . .  16,652,144  tons 

,,  Luxemburg  . .  . .  6,263,391  ,, 

-  22,915,535  tons 

,,  All  other  districts  . .  5,794,119  ,, 

28,709,654  „ 

23 


342  GERMANY  AND  INDEMNITY  QUESTION 


Imported  Ore. 


From  Sweden 
„  Spain  . . 

,,  France  and  Belgium 
,,  All  other  countries  . . 


3,249,000  tons 
2,861,200  „ 
2,100,400  „ 
1,606,200  „ 


9,816,800  tons 


Grand  Total 


38,526,454  „ 


Of  the  iron  ore  used  in  Germany  in  1910,  about  75  per 
cent,  came  from  Germany  and  25  per  cent,  was  imported 
from  abroad;  while  of  Germany’s  domestic  iron  ore,  about 
80  per  cent,  came  from  the  Lorraine-Luxemburg  district 
and  only  about  20  per  cent,  from  all  the  other  German 
districts  combined.  In  other  words,  the  great  German 
iron  industry,  the  most  powerful  industry  of  the  country, 
is  dependent  for  its  prosperity  on  imported  iron  ore,  which 
is  particularly  rich  in  metallic  iron,  and  on  iron  ore 
drawn  from  the  Lorraine  district,  which  is  situated  on 
the  French  frontier.  It  follows  that  the  great  German  iron 
industry  and  the  numerous  industries  dependent  on  it 
would  be  ruined  if  Germany  should  be  deprived  of  the 
Lorraine-Luxemburg  iron  and  the  iron  imported  from 
abroad.  That  is  a  fact  which  the  Allied  diplomats  and 
peoples  will  probably  not  overlook. 

The  Lorraine-Luxemburg  ores  have  this  peculiarity, 
that  they  are  very  rich  in  phosphorus.  As  phosphorus 
makes  iron  brittle,  it  has  to  be  extracted  from  the  ore. 
This  is  done  by  the  Gilchrist-Thomas  method  in  con¬ 
verters  lined  and  partly  filled  with  lime.  The  phosphorus 
in  the  ore  unites  with  the  lime  and  forms  a  scum,  which, 
on  rising  to  the  top,  is  drawn  off.  It  is  allowed  to  cool 
and  is  then  ground  into  a  fine  powder,  which  is  called 
basic  slag,  and  which  is  a  manure  of  the  very  greatest 
value.  Germany  is  not  only  self-supporting  in  this  im¬ 
portant  fertiliser,  but  exports  huge  quantities  of  it,  es¬ 
pecially  to  Austria-Hungary,  Russia  and  Italy. 


GERMANY  AND  INDEMNITY  QUESTION  343 


Germany  is  exceedingly  rich  in  mineral  salts  of  every 
kind,  and  she  has  an  absolute  world  monopoly  in  the 
particularly  precious  potash  salts.  The  extent  of  her 
salt  deposits  is  not  yet  exactly  known.  They  are  so  vast 
that  it  is  impossible  to  measure  them  and  to  calculate 
their  contents.  From  year  to  year  the  known  area  of 
her  subterranean  deposits  of  salt  and  potash  has  been 
increasing.  At  first  it  was  believed  that  these  salts 
occurred  only  about  Stassfurt  and  Halle,  in  the  centre 
of  Germany.  However,  potash  has  been  found  in  vast 
quantities  also  in  Thuringia,  in  the  Grand  Duchy  of 
Saxony,  in  Hesse,  in  Hanover,  in  Mecklenburg,  near 
Bremen  and  Hamburg,  and  in  Alsace  north  of  Mulhouse. 
It  is  believed  by  many  that  almost  the  whole  of  the 
North  German  plain  and  part  of  South  Germany  rest  on 
salt  deposits  so  gigantic  that  they  almost  defy  measure¬ 
ment.  Boreholes  have  been  sunk  through  6,000  feet 
of  solid  but  soluble  salts  of  all  kinds  without  coming  to 
the  end,  and  nobody  knows  how  much  deeper  one  has  to 
go  to  find  their  foundation. 

Among  the  various  kinds  of  mineral  salts,  soluble 
potash  is  at  present  the  most  valuable.  I  say  ‘  ‘  at  present  ’  ’ 
because  science  may  discover  still  more  precious  salts 
in  that  gigantic  store.  Soluble  potash  is  of  importance 
in  chemistry  and  in  many  industries.  Besides,  it  is  one 
of  the  most  valuable  and  the  most  necessary  fertilisers 
known.  The  most  important  minerals  required  in  the 
nurture  of  plants  are  three  in  number:  nitrogen,  phos¬ 
phorus  and  potassium.  Nitrogen  is  frequently  supplied 
in  the  form  of  farmyard  manure,  which  is  rich  in  ammonia ; 
phosphorus  is  given  to  plants  in  the  shape  of  superphos¬ 
phates,  such  as  basic  slag,  in  which  Germany  is  particu¬ 
larly  rich;  and  potassium  is  furnished  in  the  shape  of 
potash  manure.  Potash  is  extremely  valuable  for 
producing  heavy  crops  of  grain,  roots,  potatoes,  tobacco, 


344  GERMANY  AND  INDEMNITY  QUESTION 


and  grapes.  All  these  flourish  particularly  in  soil  naturally 
rich  in  potash,  such  as  that  of  the  black  earth  district  of 
Russia,  or  artificially  enriched  by  potash.  The  Encyclo¬ 
paedia  Britannica  says  on  the  subject  in  the  article 
“  Manures  ” : 

Potash  appears  to  be  bound  up  in  a  special  way  with  the 
process  of  assimilation,  for  it  has  been  clearly  shown  that 
whenever  potash  is  deficient  the  formation  of  the  carbo¬ 
hydrates,  such  as  sugar,  starch  and  cellulose,  does  not  go 
on  properly.  Hellriegel  and  Wilfarth  showed  by  ex¬ 
periment  the  dependence  of  starch  formation  on  an  ade¬ 
quate  supply  of  potash.  Cereal  grains  remained  small  and 
undeveloped  when  potash  was  withheld ;  because  the 
formation  of  starch  did  not  go  on.  The  same  effect  has 
been  strikingly  shown  in  the  Rothamsted  experiments 
with  mangels,  a  plot  receiving  potash  salts  as  manure 
giving  a  crop  of  roots  nearly  two  and  a  half  times  as 
heavy  as  that  grown  on  a  plot  which  had  received  no 
potash. 

Germany’s  great  agricultural  prosperity  and  the  pro¬ 
gressive  yield  of  her  crops  are  largely  due  to  her  wealth 
in  potash  and  in  phosphoric  iron  ore,  which  furnish  her 
with  the  most  precious  fertilisers.  With  regard  to 
Germany’s  potash  th q  Encyclopaedia  Britannica  states: 

Potash  manures,  with  few  exceptions,  are  natural 
products  from  the  potash-mines  of  Stassfurt  (Prussia). 
Until  the  discovery  of  these  deposits  in  1861  the  use  of 
potash  as  a  fertilising  constituent  was  very  limited,  being 
confined  practically  to  the  employment  of  wood  ashes. 
At  the  present  time  a  small  quantity  of  potash  salt — 
principally  carbonate  of  potash — is  obtained  from  sugar 
refineries  and  other  manufacturing  processes,  but  the 
great  bulk  of  the  potash  supplied  comes  from  the  German 
mines.  In  these  the  different  natural  salts  occur  in 
different  layers  and  in  conjunction  with  layers  of  rock- 
salt,  carbonate  of  lime  and  other  minerals,  from  which 
they  have  to  be  separated.  .  .  . 

Potash  is  much  esteemed  in  agriculture,  more  especially 


GERMANY  AND  INDEMNITY  QUESTION  345 


on  light  land  (which  is  frequently  deficient  in  it)  and  on 
peaty  soils,  and  for  use  with  root  crops  and  potatoes  in 
particular.  For  fruit  and  vegetable  growing  and  for 
flowers  potash  manures  are  in  constant  request. 

Potash  is  largely  used  in  the  industries,  especially  for 
making  glass,  glazing  earthenware,  iron-smelting  and 
soap  production,  and  for  making  explosives,  soda,  coal- 
tar  dyes,  chloride  of  potash,  sulphate  of  potash,  per¬ 
manganate  of  potash,  hydrochloric  acid,  oxalic  acid, 
bromine,  saltpetre,  Glauber’s  salt,  cyanide  of  potassium, 
chloride  of  lime,  etc.  The  production  of  potash  in 
Germany  has  increased  as  follows : — - 


Year. 

Tons. 

Year. 

Tons. 

1861 

2,293 

1891 

..  1,370,013 

1866 

143,000 

1896 

. .  1,782,673 

1871 

300,747 

1901 

. .  3,484,865 

1876 

586,196 

1906 

.  .  5,129,439 

1881 

1886 

943,963 
. .  1,041,545 

1911 

.  .  9,606,900 

In  1913  Germany’s  exports  of  salts,  and  especially  of 
potash,  in  all  forms  exceeded  £10,000,000.  The  most 
important  buyers  of  Germany’s  potash  were  the  United 
States,  Holland,  England  and  Sweden.  The  United 
States  employ  vast  quantities  of  German  potash  in  their 
agriculture,  especially  for  the  cultivation  of  cotton  and 
tobacco,  and  also  for  manuring  vegetables,  fruit-trees 
and  meadow  grass. 

The  quantity  of  salts  and  of  potash  possessed  by  Ger¬ 
many  is  unmeasurable  and  unestimable.  In  Germany 
it  is  frequently  stated  that  the  country  can,  at  the  present 
rate  of  consumption,  supply  the  world  with  potash  for 
at  least  five  thousand  years.  Owing  to  over-production, 
the  price  of  potash  has  been  kept  low,  at  about  10s.  per 
ton.  If  we  estimate  that  Germany  possesses  only 
50,000,000,000  tons  of  easily  accessible  potash,  it  would 
at  the  low  price  of  10s.  per  ton,  represent  a  value  of 


346  GERMANY  AND  INDEMNITY  QUESTION 


£25,000,000,000,  a  sum  which  is  twice  as  large  as  the  so- 
called  national  wealth  of  France.  However,  science  may, 
and  probably  will,  before  long  discover  further  use  for 
the  gigantic  quantities  of  salts  of  which  Germany  has 
apparently  a  monopoly.  Hence  the  value  of  Germany’s 
store  of  salts  is  as  unmeasurable  as  is  its  quantity,  and 
its  value  may  before  long  very  greatly  exceed  the  figure 
mentioned. 

Providence  has  been  very  kind  to  Germany.  It  has 
endowed  the  Germans  not  only  with  vast  and  most 
valuable  mineral  resources,  which  have  enabled  them  to 
create  great  and  exceedingly  prosperous  manufacturing 
industries,  but  it  has  given  them  at  the  same  time  ex¬ 
tremely  favourable  geographical  conditions.  The  con¬ 
figuration  of  Germany  is  eminently  favourable  to  the 
development  of  agriculture  and  of  all  the  industries. 
Agriculture  flourishes  most  on  large,  well- watered  plains, 
while  the  manufacturing  industries  naturally  arise  in 
hilly  districts  rich  in  minerals  and  water-power,  where 
men  cannot  make  a  living  by  agriculture  alone.  The 
prosperity  of  agriculture  and  of  the  manufacturing 
industries  depends,  of  course,  very  largely  on  easy 
accessibility,  on  good  communications,  on  cheap  trans¬ 
port.  The  vast  North  German  plain  offers  ideal  con¬ 
ditions  for  agriculture  and  for  the  construction  of  roads 
and  of  railroads.  Besides,  Germany  has  an  absolutely 
unique  system  of  gently  flowing,  navigable  rivers,  which 
can  easily  be  regulated  and  which  pursue,  at  almost  equal 
distance,  a  parallel  course  towards  the  North  Sea  and  the 
Baltic.  These  rivers  open  up,  not  only  all  Germany,  but 
also  the  countries  beyond,  to  Germany’s  great  advantage. 
The  Rhine  is  the  natural  outlet  of  Switzerland,  the  Elbe 
that  of  Bohemia  and  of  Northern  Austria,  and  the 
Vistula  that  of  Poland.  Hamburg  is  the  most  important 
Austrian  harbour  and  Danzig  the  most  important  Polish 


GERMANY  AND  INDEMNITY  QUESTION  347 


harbour,  while  the  Rhine  is  indispensable  to  Switzerland. 
These  parallel-flowing  rivers  can,  of  course,  be  easily  and 
cheaply  connected,  and  have  been  connected,  by  canals 
running  at  a  right  angle  to  them  through  the  plain. 
These  open  up  Germany  in  the  lateral  direction.  Lastly, 
the  Rhine  can  easily  be  connected  by  a  deep  canal  with 
the  Danube.  No  other  country  possesses  similarly 
favourable  conditions  for  the  development  of  inland 
transport  by  land,  and  especially  by  water. 

A  central  position,  the  control  of  the  inner  lines,  as 
strategists  call  it,  is  as  valuable  for  commerce  as  it  is  for 
warfare.  Being  placed  in  the  centre  of  the  European 
Continent,  Germany  became  centuries  ago  the  meeting- 
place,  the  natural  exchange  and  mart,  of  the  Continental 
nations.  From  the  earliest  times  the  trade  between  Asia, 
Africa  and  Europe  flowed  along  the  Mediterranean,  and 
went  on  either  through  Northern  Italy,  across  the  Alps,  and 
then  along  the  Rhine,  or  it  went  by  way  of  Marseilles  up 
the  Rhone  and  then  down  the  Rhine  towards  Bruges, 
Amsterdam,  Rotterdam,  Antwerp,  England,  and  vice 
versa.  The  trade  between  the  European  East  and  West 
was  carried  on  by  the  Danube  on  the  one  hand  and  by 
the  Rhine,  Elbe  and  Vistula  on  the  other  hand.  Nurem¬ 
berg,  Augsburg,  Strassburg,  Ulm,  Cologne,  Prague, 
Vienna,  Hamburg,  Danzig,  etc.,  became  wealthy  because 
they  were  the  natural  centres,  emporia  and  outlets  on  the 
great  Transcontinental  trade  routes  which  Nature  had 
provided  for  the  use  of  man. 

A  central  position  on  a  populous  continent,  such  as  that 
occupied  by  Germany,  is  exceedingly  favourable,  not  only 
for  the  development  of  international  commerce,  but  also 
for  the  rise  of  prosperous  manufacturing  industries. 
Nuremberg,  Augsburg,  Strassburg,  Ulm,  etc.,  became 
great  manufacturing  centres  largely  because  of  their 
central  position.  Their  geographical  position  resembles 


348  GERMANY  AND  INDEMNITY  QUESTION 


that  of  Chicago,  St.  Louis,  Winnipeg.  Manufacturers 
naturally  settle  in  localities  which  are  particularly 
favourable  for  developing  a  trade  in  all  directions. 
Geographically  Germany  is  far  more  favourably  situated 
for  the  industrial  conquest  of  France,  Austria-Hungary, 
Italy,  Russia  and  her  other  neighbours  than  is  England, 
through  greater  propinquity.  France  is  cut  off  from 
Russia  and  Austria-Hungary  by  the  bulk  of  Germany. 
Russia  is  cut  off  from  the  countries  of  the  West  by  Ger¬ 
man  territory. 

The  details  given  make  it  clear  that  Germany  owes 
her  vast  wealth  very  largely  to  the  possession  of  great 
and  exceedingly  valuable  natural  resources.  Her  wealth 
in  the  three  minerals  with  which  she  is  particularly 
abundantly  supplied  may  be  summarised  as  follows. 
Germany  possesses — 

423,356,000,000  tons  of  coal  at  10s.  per  ton  =£211,678,000,000 

4,000,000,000  ,,  of  iron  ore  at  5s.  per  ton=  1,000,000,000 
50,000,000,000  ,,  of  potash  at  10s.  per  ton  =  25,000,000,000 

Total  . £237,678,000,000 

The  figures  given  indicate  that  Germany’s  natural 
riches  are  far  greater  than  is  believed  by  those  who  tell 
us  that  Germany’s  national  wealth  comes  only  to 
£1 5,000,000,000,  that  the  country  will  be  ruined  if  defeated, 
and  that  she  cannot  pay  a  War  indemnity,  and  certainly 
not  an  adequate  one,  even  if  the  Allies  should  gain  a 
complete  victory. 


CHAPTER  XIV 


CAN  GERMANY  PAY  AN  INDEMNITY  ? — HER 
PRODUCTION  AND  TRADE* 

In  the  previous  chapter  I  have  shown  that  Germany  owes 
her  vast  wealth  very  largely  to  the  possession  of  very 
great  and  exceedingly  valuable  natural  resources;  that 
among  the  nations  of  Europe  she  is  by  far  the  richest 
in  coal,  iron  ore  and  potash;  that  she  has  a  geographical 
configuration  most  favourable  to  the  development  of 
agriculture  and  industry ;  that  she  possesses  an  unrivalled 
system  of  natural  waterways  which  open  up  the  country 
in  all  directions;  that  she  occupies  an  invaluable  strate¬ 
gical  position  in  the  centre  of  the  Continent  of  Europe, 
a  position  which  is  as  helpful  for  commercial  conquest 
as  for  military  aggression;  that  her  coal,  iron  ore  and 
potash  alone  are,  at  a  very  moderate  valuation,  worth 
£237,678,000,000,  a  sum  which  is  about  fifteen  times  as 
large  as  what  is  usually  called  the  national  wealth  of 
the  United  Kingdom.  W ealth  is  created  by  the  exploita¬ 
tion  of  the  resources  of  Nature  by  man.  Let  us  now 
consider  how  the  Germans  have  converted  their  natural 
resources  into  wealth  and  power.  Such  an  investigation 
will  yield  some  extremely  valuable  lessons  to  the  prac¬ 
tical  statesman.  Besides,  the  facts  and  figures  which  I 
shall  furnish  may  help  in  answering  the  question  whether 
Germany  will  be  able  or  not  be  able  to  pay  an  adequate 
indemnity  if  the  Allies  should  gain  a  complete  victory. 

During  the  last  few  decades,  Germany,  which  not  so 

*  From  The  Fortnightly  Review,  July,  1918. 

349 


350  GERMANY  AND  INDEMNITY  QUESTION 


very  long  ago  was  a  poor  and  mainly  agricultural  country, 
has  become  an  exceedingly  wealthy  industrial  and  com¬ 
mercial  State,  in  which  agriculture  occupies  a  secondary 
place  as  a  creator  of  wealth.  Before  the  War  Germany’s 
wealth  was  probably  as  great  as  that  of  the  United 
Kingdom,  and  the  combined  production  of  all  her  indus¬ 
tries  was  very  likely  greater  than  that  of  all  the  British 
industries.  While  the  United  Kingdom  was  very  superior 
to  Germany  in  cotton  manufacturing,  shipbuilding  and 
some  other  industries,  Germany  was  very  superior  to 
Great  Britain  in  the  iron  and  steel  industries,  the  chemical 
industries,  the  electrical  industries,  the  glass  industry 
and  a  number  of  others. 

Formerly  Great  Britain  pursued  in  matters  economic 
a  national  policy  which  promoted  production  all  round. 
Successive  Governments  fostered  alike  agriculture,  the 
manufacturing  industries  and  international  trade.  In 
1846  England  abandoned  her  national  economic  policy 
for  a  sectional  one.  She  adopted  the  policy  of  laissez 
faire,  of  one-sided  free  imports,  miscalled  Free  Trade, 
under  the  assumption  that  that  policy  was  particularly 
favourable  to  the  development  of  the  manufacturing 
industries  and  of  international  trade,  and  allowed  her 
agriculture  to  decline  and  to  decay.  English  politicians 
and  economists  of  the  laissez  faire  school  met  the  bitter 
complaints  of  agriculturists  and  others  with  the  assertion 
that  industry  was  more  profitable  than  agriculture;  that 
in  a  densely  populated  industrial  and  commercial  Euro¬ 
pean  State  there  was  no  room  for  a  prosperous  agriculture. 

Bismarck  introduced  in  1879  a  policy  of  Protection 
which  favoured  simultaneously  and  equally  agriculture 
and  the  manufacturing  industries  of  Germany.  It  is 
generally  known  that  the  German  manufacturing  indus¬ 
tries  have  mightily  expanded  during  the  last  few  decades ; 
but  it  is  not  very  widely  known  that  the  rural  industries 


GERMANY  AND  INDEMNITY  QUESTION  351 


also  have  rapidly  advanced.  The  progress  of  a  nation’s 
rural  industries  can  best  be  measured  by  their  productive¬ 
ness.  Germany’s  agricultural  production  has  increased 
as  follows  since  1880: 


The  German  Harvest. 


Year. 

Bye. 

1880  .. 

Tons. 

4,952,525 

1890  .. 

5,868,078 

1900  .. 

8,550,659 

1910  .. 

10,511,160 

1913  .. 

12,222,394 

Wheat. 

Oats. 

Tons. 

Tons. 

2,345,278 

4,228,128 

2,830,921 

4,913,544 

3,841,165 

7,091,930 

3,861,479 

7,900,376- 

4,655,956 

9,713,965 

Year. 

Potatoes. 

Sugar. 

Hay. 

Tons. 

Tons. 

Tons. 

1880  .. 

19,466,242 

415,000 

19,563,388 

1890  .. 

23,320,983 

1,261,000 

18,859,888 

1900  .. 

40,585,317 

1,795,000 

23,116,276 

1910  .. 

43,468,395 

1,947,580 

28,250,115 

1913  .. 

54,121,146 

2,632,000 

29,184,994 

Between  1880  and  1913 — 1913  was  a  particularly 
bountiful  harvest  year — the  production  of  the  three 
principal  German  grain  crops,  rye,  wheat  and  oats, 
considerably  more  than  doubled,  the  production  of  pota¬ 
toes  nearly  trebled  and  that  of  sugar  grew  sixfold,  while 
the  hay  harvest  increased  by  about  50  per  cent.  Before 
the  War  Germany  produced  about  one-third  of  the  world’s 
potatoes.  She  was  by  far  the  largest  potato-grower  in 
the  world.  She  raised  about  eight  times  as  much  as  the 
whole  of  the  United  Kingdom.  Only  from  one-third 
to  one-fourth  of  her  potatoes  was  used  for  human  food. 


352  GERMANY  AND  INDEMNITY  QUESTION 


The  bulk  of  her  gigantic  crop  was  employed  either  for 
feeding  enormous  numbers  of  cattle  and  pigs  or  for  making 
spirit  and  starch  and  for  other  industrial  purposes.  It 
will  be  noticed  that  during  the  period  under  consideration 
Germany’s  agricultural  production  increased  rapidly 
and  continuously.  The  rapid  and  continuous  increase 
in  the  produce  of  Germany’s  harvest  was  accompanied 
by  a  similar  increase  in  Germany’s  meat  production. 
Her  live  stock  increased  as  follows  during  the  years  when 
animal  censuses  were  taken : 


Live  Stock  of  Germany. 


Year. 

Horses. 

Cattle. 

Sheep. 

Pigs. 

1873  .. 

3,352,231 

15,776,702 

24,999,406 

7,124,088 

1883  .. 

3,522,525 

15,786,764 

19,189,715 

9,206,195 

1892  .. 

3,836,256 

13,555,694 

13,589,612 

12,174,288 

1897  .. 

4,038,495 

18,490,772 

10,866,772 

14,274,557 

1900  .. 

4,184,099 

19,001,106 

9,672,143 

16,758,436 

1907  .. 

4,337,263 

20,589,856 

7,681,072 

22,080,008 

1913  .. 

4,523,059* 

20,994,344 

11,320,460 

25,659,140 

Between  1880  and  1913,  when  the  British  crops  de¬ 
creased  to  an  alarming  extent,  the  German  crops  fully 
doubled.  Between  1883  and  1913,  while  British  live 
stock  increased  only  by  about  10  per  cent.,  German 
meat  production  fully  doubled,  for  the  number  of  cattle 
increased  by  one-third,  while  the  number  of  pigs  nearly 
trebled.  Moreover,  the  increase  in  meat  production 
was  greater  than  appears  from  these  figures,  because 
breeds  were  greatly  improved,  so  that  the  weight  of  the 
average  animal  was  much  greater  in  1913  than  it  had 
been  thirty  years  before.  As  sheep-rearing  is  impossible 

*  The  figure  relating  to  horses  is  for  1912,  as  horses  were  not 
enumerated  in  1913. 


GERMANY  AND  INDEMNITY  QUESTION  353 

if  intensive  agriculture  is  pursued,  sheep,  which  yield 
comparatively  little  meat,  were  replaced  by  the  more 
prolific  and  more  valuable  pigs. 

The  enormous  increase  in  Germany’s  crops  and  Ger¬ 
many’s  live  stock  was  caused,  not  by  extending  the  agri¬ 
cultural  area  of  the  country,  but  by  more  intensive  and 
more  scientific  cultivation.  Since  1880  the  yield  per 
hectare — a  hectare  is  roughly  equal  to  2J  acres — in¬ 
creased  as  follows  according  to  the  official  statistics : 


Average  Yield  per  Hectare  of  Ground  in  Kilogrammes. 


Y  ear. 

Bye. 

Wheat. 

Oats. 

Barley. 

!  Potatoes. 

1880  . . 

840 

1,290 

1,130 

1,320 

7,100 

1885  . . 

1,000 

1,360 

1,150 

1,300 

.  9,600 

1890  . . 

1,010 

1,440 

1,260 

1,370 

8,000 

1895  .. 

1,120 

1,450 

1,300 

1,430 

10,440 

1900  .. 

1,440 

1,870 

1,720 

1,800 

12,600 

1905  . . 

1,560 

1,920 

1,570 

1,790 

14,600 

1910  .. 

1,700 

1,990 

1,840 

1,850 

13,200 

1913  .. 

1,910 

2,360 

2,190 

2,220 

15,860 

Between  1880  and  1913 — the  latter  year  yielded  excep¬ 
tionally  heavy  crops — the  produce  per  hectare,  or  per 
acre,  practically  doubled  with  regard  to  all  the  staple 
crops.  In  some  cases  the  increase  was  a  little  less  than 
double,  in  others  it  more  than  doubled.  The  increase 
in  yield  per  hectare  was  continuous.  That  is  surely  a 
most  remarkable  record,  and  it  was  achieved  obviously 
by  improved  cultivation,  by  the  application  of  science 
to  agriculture.  The  vast  increase  in  the  production  of 
sugar  also  was  largely  due  to  improved  methods  of  culti¬ 
vation,  whereby  the  percentage  of  sugar  contained  in 
the  beets  was  considerably  increased.  The  official 
figures  make  the  following  showing : 


354  GERMANY  AND  INDEMNITY  QUESTION 


Tear. 

Production  of 
Sugar  in  Germany . 

Percentage  of  Raw 
Sugar  Extracted 
from  Beet. 

Tons. 

1875-6  . . 

358,048 

8-60 

1880-1  .v 

573,030 

9-04 

1885-6  . . 

838,105 

11-85 

1890-1  . . 

1,336,221 

12-54 

1895-6  . . 

1,637,057 

14-02 

1900-1  . . 

1,979,000 

14-93 

1905-6  . . 

2,400,771 

15-27 

1910-11  .. 

2,589,869 

16-45 

1912-13  .. 

2,706,327 

16-30 

Although  Germany’s  agricultural  production  doubled 
during  the  last  few  decades,  her  agricultural  population 
either  remained  stationary  or  actually  decreased. 
Whether  it  did  the  one  or  the  other  is  not  quite  clear, 
because  at  the  last  Industrial  Census,  that  of  1907,  a 
different  basis  was  adopted  in  enumerating  the  agricul¬ 
tural  workers.  Measured  by  the  number  of  agricultural 
workers  given  in  the  only  three  Industrial  Censuses  which 
were  taken  in  Germany,  there  would  seem  to  be  a  con¬ 
siderable  increase  in  agricultural  labour  employed. 
On  the  other  hand,  measured  by  the  figures  relating  to 
persons  employed,  including  their  dependents,  the  number 
of  agricultural  workers  would  seem  to  have  steadily  and 
very  considerably  declined.  The  official  figures  which 
allow  of  these  two  irreconcilable  interpretations  are 
as  follows : 


Year. 

\ 

Persons  Employed 
in  Agriculture 
and  Forestry. 

Persons  Employed 
in  Agriculture 
and  Eorestry,  in - 
eluding  Dependents. 

1882  . . 

8,236,500 

19,225,500 

1895  .  . 

8,292,700 

18,501,300 

1907  . . 

9,883,300 

17,682,200 

GERMANY  AND  INDEMNITY  QUESTION  355 


The  official  figures  given  make  it  doubtful  whether  the 
number  of  agricultural  workers  has  increased  or  declined. 
They  allow  of  either  interpretation.  Hence  it  will  perhaps 
be  best  to  assume  that  the  number  of  agricultural  workers 
has  remained  approximately  stationary.  It  would  follow 
that  production  per  agricultural  worker  has  doubled 
during  the  last  few  decades,  and  this  doubling  of  agricul¬ 
tural  production  was  obviously  caused  by  the  increased 
employment  of  powerful  labour-saving  machinery.  The 
three  Industrial  Censuses  of  Germany  indicate  that 
machinery  used  in  agriculture  increased  as  follows  during 
those  years  for  which  alone  official  statistics  are  available : 


Year. 

Steam 
Ploughs . 

Seed- 

Casting 

Machines. 

Mowing 

Machines. 

Steam- 

Threshing 

Machines. 

Other 

Threshing 

Machines 

1882  . . 
1895  . . 

1907  .. 

836 

1,696 

2,995 

63,842 

169,465 

290,039 

19,634 

35,084 

331,325 

75,690 

259,364 

438,837 

298,367 

596,869 

947,003 

During  the  twenty-five  years  from  1882  to  1907  the 
machinery  employed  in  German  agriculture  has  increased 
enormously.  The  number  of  steam-ploughs  has  increased 
three  and  a  half -fold,  that  of  seed-casters  nearly  fivefold, 
that  of  steam-threshing  machines  nearly  sevenfold,  and 
that  of  mowing  machines  nearly  seventeenfold.  Of 
course,  the  doubling  of  production  per  acre  could  not  be 
achieved  by  using  labour-saving  machinery  alone.  The 
doubling  of  production  could  be  brought  about  only  by 
increasing  the  fertility  of  the  soil.  The  Germans  have 
applied  science  and  organisation  to  their  rural  industries. 
Their  chemists  have  analysed  the  soils,  their  biologists 
have  studied  the  most  scientific  methods  of  feeding 
animals,  etc.,  and  the  authorities  have  spread  the  informa¬ 
tion  supplied  by  the  scientists  among  the  agriculturists, 


356  GERMANY  AND  INDEMNITY  QUESTION 


and  have  organised  the  rural  industries  so  as  to  eliminate 
all  factors  regarding  their  expansion.  Of  course,  the 
productivity  of  the  soil  can  be  greatly  increased  only  by 
the  lavish  use  of  the  best  manures,  whereby  a  naturally 
poor  soil  can  be  converted  into  an  extremely  rich  one. 
As  I  have  explained  in  the  preceding  chapter,  the  two 
most  important  fertilisers,  apart  from  nitrogen — stable 
manure,  which  contains  ammonia  is  rich  in  nitrogen — 
are  phosphorus  and  potassium.  Phosphorus  is  contained 
in  the  basic  slag  which  is  yielded  in  large  quantities  by 
the  iron  ore  of  Lorraine,  which  is  very  rich  in  phosphorus ; 
while  potassium  is  provided  for  agricultural  purposes 
by  the  enormous  deposits  of  soluble  potash  of  which 
Germany  has  apparently  a  monopoly.  By  the  applica¬ 
tion  of  basic  slag  and  of  potash,  and  especially  by  using 
potash,  the  yield  of  grain,  potatoes  and  root  crops  can  be 
vastly  increased.  It  cannot  be  doubted  that  Germany 
owes  the  prosperity  of  her  rural  industries  not  only  to 
the  application  of  science  and  organisation  to  agriculture, 
but  also  to  the  fact  that  Nature  has  endowed  her  with 
an  abundance  of  the  two  most  precious  fertilisers — with 
superphosphates  and  potash.  The  prosperity  of  Germany’s 
agriculture  is  therefore  largely  due  to  mineralogical  and 
industrial  causes. 

While  Germany’s  agricultural  population  has  remained 
approximately  stationary,  that  portion  of  her  population 
which  is  engaged  in  industry  and  trade  has  rapidly 
increased,  as  the  following  figures  show : 


Persons  Employed,  including  their  Dependents. 


Year. 

Agriculture 

and 

Forestry. 

Per 

Cent. 

Industry. 

Per 

Cent. 

Trade 

and 

Transport. 

Per 

Cent. 

1882  . . 

19,225,500 

42-0 

16,058,100 

35-1 

4,531,100 

9-9 

1895  . . 

18,501,300 

35-6 

20,253,200 

38-9 

5,966,900 

11-5 

1907  .. 

17,681,200 

28-5 

26,386,500 

42-5 

8,278,200 

13-3 

GERMANY  AND  INDEMNITY  QUESTION  357 


While  the  population  living  by  agriculture  and  forestry 
has  apparently  decreased  by  nearly  10  per  cent.,  the 
population  living  by  industry  and  by  trade  and  transport 
has  very  greatly  increased.  The  increase  in  employment 
in  the  various  industries  has  been  unequal.  Some  indus¬ 
tries  have  advanced  more  quickly  than  others.  By 
large  groups  the  persons  employed  have  increased  as 
follows : 


Employed  in  Germany,  exclusive  of  Dependents. 


Year. 

In 

Mining. 

In  Metal- 
Working. 

In  the 
Machinery 
Trades. 

In  the 
Chemical 
Industries. 

1882  .  . 

430,134 

459,713 

356,089 

71,777 

1895  . . 

536,289 

639,755 

582,672 

115,231 

1907  . . 

860,903 

937,020 

1,120,282 

172,441 

* 

Year. 

In  the 
Textile 
Industries. 

. 

In  the 
Building 
Trade. 

In  Trade 
and 

Commerce. 

Total 

Industry 

and 

Commerce. 

1882  . . 

910,089 

533,511 

838,392 

7,340,789 

1895  .  . 

993,257 

1,045,516 

1,332,993 

10,269,269 

1907  .. 

1,088,280 

1,563,594 

2,063,634 

14,435,922 

During  the  period  1882  to  1907  the  persons  employed 
in  industry  and  trade  have  doubled  in  number.  The 
increase  has  been  smallest  in  the  case  of  the  textile  indus- 
tries,  for  their  workers  have  increased  only  by  about 
20  per  cent.  The  number  of  workers  engaged  in  mining 
and  in  metal-working  has  almost  exactly  doubled.  The 
number  of  hands  employed  in  the  chemical  industry  and 
in  trade  and  commerce  has  grown  two  and  a  half-fold, 
while  those  engaged  in  the  machinery  trade  and  in  building 

24 


358  GERMANY  AND  INDEMNITY  QUESTION 


operations  have  trebled.  Employment  has  obviously 
expanded  most  strongly  in  the  production  of  machinery 
and  in  the  building  trade.  Then  came  the  chemical 
industries  and  trade  and  commerce,  and  then  mining  and 
metal-working.  The  textile  industry  came  last.  How¬ 
ever,  it  would  be  rash  to  conclude  from  the  figures  given 
that  the  progress  in  the  textile  industries  of  Germany 
has  been  slow,  because  production  may  be  vastly  increased 
without  correspondingly  increasing  the  number  of  workers 
by  effecting  great  improvements  in  organisation,  and 
especially  in  mechanical  outfit.  At  all  events,  the  figures 
given  indicate  a  powerful  expansion  in  employment, 
especially  in  the  most  modern  industries,  in  which  the 
greatest  skill  and  scientific  knowledge  are  required,  and 
in  building  operations.  The  trebling  of  the  number  of 
workers  engaged  in  building  testifies  to  the  rapid  increase 
of  Germany’s  wealth  and  spending  power. 

All  modern  manufacturing  industries  depend  for  their 
prosperity  on  the  employment  of  labour-saving  machinery 
driven  either  by  steam  or  electricity.  As  Germany  has 
little  power  derived  from  waterfalls,  except  in  the  extreme 
south  of  the  country,  the  electric  energy  used  in  manu¬ 
facturing  is  derived  from  steam,  is  based  upon  coal. 
Coal  is  the  force  which  sets  in  motion  nearly  all  the 
machinery  used  in  Germany,  and  the  machinery  itself, 
both  for  manufacturing  and  for  moving  raw  materials 
and  manufactured  goods  to  and  fro  by  land  and  by  water, 
is  made  principally  of  iron.  Besides,  the  iron  industry 
is  the  most  important  of  German  industries.  It  follows 
that  one  can  measure  the  expansion  of  Germany’s  indus¬ 
trial  production  from  the  expansion  of  her  production 
of  coal  and  of  iron.  Progress  is  a  term  of  comparison. 
We  can  realise  the  progress  made  by  a  nation  only  by 
comparing  it  with  the  progress  effected  by  another  nation 
which  is  similarly  situated.  Let  us,  therefore,  compare 


GERMANY  AND  INDEMNITY  QUESTION  359 

the  expansion  of  the  production  of  coal  and  iron  in 
Germany  and  in  the  United  Kingdom : 


Y  ear. 

Production  of  Coal  in — 

Production  of  Iron  in — 

Germany. 

United 

Kingdom. 

Germany. 

United 

Kingdom. 

Tons. 

Tons. 

Tons. 

Tons. 

1880  . . 

59.120,000 

149,380,000 

2,729,000 

7,802,000 

1885  . . 

73,670,000 

161,960,000 

3,687,000 

7,369,000 

1890  . . 

89,290,000 

184,590,000 

4,658,000 

8,033,000 

1895  . . 

103,960,000 

193,350,000 

5,465,000 

7,827.000 

1900  . . 

149,790,000 

228,770,000 

8,521,000 

9,052,000 

1905  . . 

173,660,000 

239,890,000 

10,988,000 

9,746.000 

1910  . . 

221,980,000 

264,500,000 

14,793,000 

10,380,000 

1913  .. 

273,650,000 

287,410,000 

19,292,000 

10,260,000 

The  figures  given  in  the  above  table  indicate  that 
whereas  England’s  industrial  progress,  as  measured  by 
the  production  of  coal  and  iron,  was  slow,  that  of  Germany 
was  exceedingly  rapid.  Apparently  Germany  had  before 
the  War  overtaken  the  United  Kingdom  as  a  manufac¬ 
turing  nation.  In  1880  Great  Britain  produced  two 
and  a  half  times  as  much  coal  as  Germany.  Probably 
she  exceeded  Germany  at  that  time  in  the  productive 
capacity  of  her  industries  to  a  similar  degree.  Rapidly 
Germany  caught  up  the  United  Kingdom  as  a  producer 
of  coal,  and  in  1913  she  had  drawn  almost  level  with 
Great  Britain.  If  we  allow  for  the  fact  that  the  United 
Kingdom  exports  a  far  larger  quantity  of  coal  than 
Germany,  and  bear  in  mind  that  coal  is  used  in  private 
houses  far  more  wastefully  in  the  United  Kingdom  than 
in  Germany,  because  of  the  prevalence  of  open  stoves  in 
the  former  country,  it  seems  obvious  that  the  German 
industries  consumed  in  1913  considerably  more  coal  than 
the  British  industries.  We  may  therefore  say  that 


360  GERMANY  AND  INDEMNITY  QUESTION 


Germany’s  industrial  coal  consumption  was  greater  than 
England’s  industrial  coal  consumption,  and  that  Ger¬ 
many’s  industrial  production  was  probably  greater  than 
England’s  industrial  production. 

In  iron  production  also  Germany  advanced  far  more 
rapidly  than  the  United  Kingdom.  In  1880  Great  Britain 
produced  nearly  three  times  as  much  iron  as  Germany. 
Since  then  the  position  has  been  reversed.  In  1913 
Germany  produced  twice  as  much  iron  as  the  United 
Kingdom.  Between  1880  and  1913  British  iron  produc¬ 
tion  increased  by  30  per  cent.,  but  German  iron  production 
grew  by  no  less  than  600  per  cent.,  or  twenty  times  as 
fast.  Between  1880  and  1895  British  iron  production 
increased  merely  by  25,000  tons,  while  German  iron 
production  increased  by  2,736,000  tons,  or  more  than 
a  hundred  times  as  fast.  Between  1900  and  1913  the  iron 
production  of  the  United  Kingdom  increased  by  1,208,000 
tons,  while  that  of  Germany  increased  by  no  less  than 
10,771,000  tons.  The  tremendous  advance  of  Germany 
in  the  production  of  coal  and  iron  makes  it  understandable 
why  the  number  of  workers  employed  in  the  German 
mining  and  metallurgical  industries  has  vastly  increased, 
as  has  been  shown  in  the  beginning  of  this  chapter. 
Naturally,  the  production  of  other  industries  which 
consume  coal  and  iron  in  large  quantities  has  increased 
at  a  similarly  rapid  pace.  Moreover,  Germany  has 
overtaken  Great  Britain  not  only  in  the  production  of 
iron  and  steel,  but  also  in  the  production  of  many  commo¬ 
dities  made  of  iron  and  steel.  Formerly  England  was  the 
greatest  producer  and  exporter  of  machinery  in  the  world. 
Germany  has  apparently  overtaken  England  in  the  pro¬ 
duction  of  machinery  as  well.  In  1912  Germany’s 
machinery  exports,  both  gross  and  net,  were  larger  than 
Great  Britain’s  machinery  exports. 

The  prosperity  of  the  German  iron  and  steel  industry 


GERMANY  AND  INDEMNITY  QUESTION  361 


and  of  all  the  numerous  industries  dependent  upon  it  is 
due  to  a  variety  of  causes.  One  of  the  principal  causes 
consists  in  Germany’s  great  wealth  in  coal  and  iron. 
Another  exceedingly  important  cause  consists  in  the 
excellence  of  Germany’s  inland  transport  sytem.  While 
in  the  United  Kingdom  coal,  iron  and  harbours  lie  in  close 
proximity,  Germany  manufactures  her  iron  and  steel 
far  inland,  and  her  coal-beds  are  separated  by  very  large 
distances  from  her  iron-beds.  The  great  iron-ore  mines 
of  Lorraine-Luxemburg  are  separated  from  the  great 
coal-beds  of  the  Rhenish-Westphalian  district  by  the 
distance  of  more  than  200  miles.  The  iron  ore  sent  to 
the  Rhenish-Westphalian  district  from  French  Lorraine, 
Spain  and  Sweden  has,  of  course,  to  travel  over  still 
longer  distances.  Some  decades  ago  English  iron  experts, 
who  had  examined  German  affairs,  had  declared  that 
Germany  could  never  develop  a  powerful  iron  industry, 
because  the  long  distances  separating  coal  and  iron  from 
one  another  made  the  cost  of  bringing  them  together  for 
smelting  purposes  prohibitive.  The  cost  would  indeed 
have  been  prohibitive  if  German  inland  freights  were  as 
scandalously  high  as  are  British  inland  freights.  The 
exceedingly  efficient  State  railways  of  Germany  charge 
very  low  freights,  and  still  lower  freights  than  those 
charged  by  the  railways  prevail  on  Germany’s  inland 
waterways.  As  North  Germany  is  a  level  plain,  the 
German  rivers  follow  a  gentle  course.  They  can  easily 
be  regulated,  and  can  easily  be  connected  by  lateral 
canals.  The  excellence  of  the  German  inland  transport 
system  has  therefore  powerfully  contributed  to  the  pros¬ 
perity  of  the  German  iron  and  steel  industry  and  of  the 
numerous  industries  which  use  iron  and  steel. 

The  modern  industries  have  coal  and  iron  for  basis. 
Hence  the  industrial  strength  and  progress  of  a  nation 
can  be  measured  by  its  production  of  coal  and  iron, 


362  GERMANY  AND  INDEMNITY  QUESTION 


and  especially  by  its  consumption  of  coal  and  iron. 
However,  as  modern  industries  depend  on  engine  power, 
the  industrial  progress  of  a  nation  may  also  be  ascertained 
from  the  increase  of  the  machinery  used.  As  there  are 
no  Imperial  engine  statistics  for  Germany,  I  would  show 
the  development  of  the  machinery  used  in  Germany  by 
the  increase  of  engine  power  employed  in  Prussia.  This 
has  progressed  as  follows : 


Stationary  Steam  Engines  in  Prussia. 


In  1878 
In  1885 
In  1895 
In  1905 
In  1912 


887,780  horse-powers 
1,221,884  „ 

2,358,175  „ 


4,684,948 

6,182,116 


Between  1878  and  1912  Prussia’s  engine  power  has 
increased  sevenfold.  Her  productive  power  should  have 
increased  more  than  sevenfold,  because  modern  machinery 
economises  power.  The  engine  power  of  Germany  is 
approximately  50  per  cent,  greater  than  that  of  Prussia. 
Unfortunately  no  comparison  can  be  instituted  between 
England  and  Germany  with  regard  to  the  progress  made 
in  the  use  of  labour-saving  machinery,  because  statistics 
of  the  horse-powers  used  in  manufacturing  in  England 
over  a  number  of  years  do  not  exist. 

Although,  as  shown  in  the  beginning  of  this  chapter, 
the  number  of  workers  employed  in  the  German  textile 
industries  has  increased  only  by  20  per  cent,  between 
1882  and  1907,  German  textile  production  has  increased 
far  more  rapidly  than  would  appear  from  the  small  increase 
in  the  number  of  the  textile  workers.  Professor  Oppel, 
in  his  book  on  the  German  Textile  Industries  published 
in  Leipzig  in  1912,  stated  that  Germany’s  consumption 
of  the  principal  materials  used  in  spinning  and  weaving 
had  increased  as  follows : 


GERMANY  AND  INDEMNITY  QUESTION  363 


Germany’s  Consumption  of — 


Year. 

Raw  Cotton . 

Raw  Wool. 

Raw  Silk. 

Tons. 

Tons. 

Tons. 

1875 

114,500 

38,900 

2,630 

1882 

140,600 

70,300 

2,414 

1895 

283,400 

163,600 

4.302 

1910 

380,734 

187,116 

7,242 

It  is  regrettable  that  Professor  Oppel  does  not  supply 
figures  for  the  intervening  years. 

Measured  by  the  consumption  of  raw  materials,  the 
production  of  cotton  goods,  woollen  goods  and  silk 
goods  approximately  trebled  between  1882  and  1910,  and 
considerably  more  than  trebled  between  1875  and  1910. 
Germany  is  not  only  self-supporting  in  textiles,  but  on 
balance  is  an  exporter  of  these  goods.  In  1875  she 
exported  on  balance  textiles  to  the  value  of  £6,860,000. 
That  excess  had  grown  by  1910  to  £34,375,000,  or  had 
increased  fivefold.  The  development  of  the  German 
textile  industries,  both  as  suppliers  to  the  home  market 
and  as  exporters,  is  satisfactory,  although,  of  course, 
England  is  ahead  of  Germany  in  the  production  of  cotton 
goods,  while  Germany  is  far  ahead  of  Great  Britain  in 
the  production  of  silk  goods. 

The  increase  of  the  wealth  of  a  modern  nation  depends 
in  the  first  place  upon  production,  and  only  in  the  second 
place  upon  trade.  A  nation  can  conceivably  be  wealthy 
with  a  vast  production  even  if  its  trade  is  insignificant, 
but  it  is  inconceivable  that  a  nation  should  become  pros¬ 
perous  by  a  large  trade  if  it  lacked  production.  A  nation 
can  grow  wealthy  by  trade  only  if  it  monopolises  trade; 
if  the  other  nations  are  so  backward  and  so  ignorant  of 
trade  that  it  can  make  vast  profits  out  of  their  ignorance. 


364  GERMANY  AND  INDEMNITY  QUESTION 


Commerce  may  be  an  important  creator  of  wealth,  but 
in  the  modern  world  it  is  no  longer  of  preponderant  im¬ 
portance.  Commerce  may  be  internal  or  external,  or 
both  internal  and  external.  Germany  has  vastly  increased 
both  her  internal  and  her  external  trade.  The  rapid 
and  gigantic  expansion  of  Germany’s  inland  trade  may  be 
gauged  from  the  development  of  her  railway  traffic, 
which  has  grown  as  follows : 


Goods  carried  by  Railways. 


In  1880 
In  1912 
In  1880 
In  1912 


165,000.000  tons. 

668,000,000  ,, 

13,487,000,000  ton-kilometres. 

66,021,000,000  „ 


Between  1880  and  1912  the  tonnage  transported  by 
the  German  railways  has  increased  fourfold,  while  the 
ton-kilometres  have  increased  fivefold.  It  is  safe  to 
assert  that  no  similar  progress  has  been  realised  by  any 
other  European  nation. 

The  progress  of  Germany’s  inland  commerce  carried 
on  by  waterways  has  been  still  more  remarkable  than  the 
increase  of  her  railway  traffic.  The  development  of 
Germany’s  inland  shipping  trade  may  best  be  gauged  from 
the  following  figures : 


Germany’s  Inland  Shipping. 


Y  ear. 

1 

No.  of  Ships. 

Carrying  Capacity. 

Tons. 

Tons. 

1882 

18,715 

1,658,266 

1887 

20,390 

2,100,705 

1892 

22,848 

2,760,553 

1897 

22,564 

3,370,447 

1902 

24,839 

4,877,509 

1907 

26,235 

5,914,020 

1912 

29.533 

I  . 

7,394,657 

GERMANY  AND  INDEMNITY  QUESTION  365 


While  the  number  of  ships  used  in  Germany’s  inland 
shipping  has  increased  by  only  about  50  per  cent.,  their 
carrying  capacity  has  increased  by  nearly  400  per  cent. 
In  other  words,  the  individual  ships  have  grown  bigger 
and  bigger.  Their  efficiency  has  been  vastly  increased. 
Many  marvel  at  the  development  of  Germany’s  Merchant 
Marine,  but  the  increase  of  her  inland  shipping  is  still 
more  wonderful.  In  1912  Germany’s  inland  fleet  was 
far  larger  than  her  huge  Merchant  Marine.  Her  Merchant 
Marine  had  in  that  year  3,023,725  tons  net  and  4,708,998 
tons  gross. 

The  progress  of  the  external  commerce  of  a  nation  can 
be  measured  either  by  its  foreign  trade  or  by  its  merchant 
marine.  Let  us  see  how  both  have  developed  in  Germany. 
Germany  has  become  a  country  which  lives  chiefly  by 
its  manufacturing  industries.  According  to  the  econo¬ 
mists  of  the  laissez-faire  school,  a  protective  tariff  cripples 
the  industries  of  a  nation  and  lames  its  export  trade  in 
manufactured  goods.  In  view  of  these  doctrines  it  is 
particularly  interesting  to  study  the  development  of 
Germany’s  exports  of  manufactured  goods. 

Germany’s  Exports  of  Domestic  Manufactures. 

Year.  1  £ 

1880  .  83,500,000 

1890  .  107,440,000 

1900  .  149,100,000 

1910  .  239,800,000 

1913  .  319,800,000 

Between  1880  and  1913  Germany’s  exports  of  manu¬ 
factured  goods  have  practically  quadrupled.  No  similar 

showing  can  be  made  for  the  United  Kingdom. 

Germany’s  Merchant  Marine  has  increased  as  follows 
since  the  creation  of  the  Empire: 


366  GERMANY  AND  INDEMNITY  QUESTION 


Y  ear. 

Tons  Net. 

In  1871  . . 

982,355 

In  1881  .. 

1,181,525 

In  1891  . . 

1,433,413 

In  1901  . 

1,941,645 

In  1911  .. 

2,903,570 

In  1913  .. 

3,153,724 

increase  of  the  German  Merchant  Marine  has  been 

exceedingly  rapid.  In  a  few  decades  it  has  obtained 
the  second  place  among  the  mercantile  fleets  of  the 
world. 

Production  is  more  important  than  commerce  as  a 
creator  of  wealth.  The  figures  given  in  these  pages  show 
that  German  production  in  field,  mine  and  factory  has 
increased  much  faster  than  British  production,  notwith¬ 
standing,  or  probably  because,  the  economic  policy 
which  she  has  pursued,  of  which  Fiscal  Protection  is 
merely  a  part,  and  possibly  a  part  of  inferior  importance. 

During  the  last  few  decades  Germany,  which  was 
formerly  a  poor  agricultural  State,  has  become  an  exceed¬ 
ingly  wealthy  industrial  and  commercial  country.  Wealth 
may  be  of  two  kinds.  It  may  be  real  or  conventional. 
The  real  wealth  of  a  nation  consists  of  fields,  factories, 
machinery,  towns,  railways,  canals,  etc.  The  conven¬ 
tional  wealth  of  a  nation  consists  of  paper  securities, 
precious  metals,  bank  deposits  and  the  like.  Of  course, 
the  real  wealth  of  a  nation  is  far  more  important  than 
its  conventional  wealth.  It  is  clear  that  Germany’s 
national  capital  has  increased  enormously  through  the 
increase  of  her  real  wealth,  through  the  vastly  augmented 
productive  power  of  her  fields  and  factories,  through  the 
increase  of  her  machinery,  the  enlargement  and  improve¬ 
ment  of  her  towns,  the  vast  additions  made  to  railways, 
canals  and  other  valuable  undertakings.  However,  as 
men  generally,  though  very  erroneously,  see  wealth 
rather  in  conventional  than  in  real  values,  let  us  briefly 


GERMANY  AND  INDEMNITY  QUESTION  367 


glance  at  the  development  of  Germany’s  paper  wealth. 
Wealth,  like  poverty,  is  a  term  of  comparison.  We  can, 
therefore,  best  measure  the  progress  of  the  paper  wealth 
of  Germany  by  comparing  it  with  the  development  of 
paper  wealth  in  Great  Britain.  The  deposits  in  the 
savings  banks  in  the  two  countries  have  grown  as 
follows  : 


Year. 

j 

Savings  Banks  Deposits 
in  Germany. 

Savings  Banks  Deposits 
in  Great  Britain. 

£ 

£ 

1880 

130,690,000 

77,721,084 

1890 

256,865,000 

111,285,359 

1900 

441,929,000 

187,005,562 

1910 

839,028,000 

221,158,021 

1913 

984,450,000 

241,507,028 

In  1880  the  German  savings  banks  deposits  exceeded 
the  British  by  only  £53,000,000.  In  1913  the  German 
savings  banks  deposits  exceeded  the  British  by  no  less 
than  £743,000,000.  The  increased  prosperity  of  the  Ger¬ 
man  people  can  be  measured  not  only  by  their  improved 
conditions  of  life  and  by  the  colossal  growth  of  the  savings 
banks  deposits,  but  also  by  the  growth  of  the  deposits 
in  the  ordinary  banks,  ip  the  co-operative  societies, 
building  societies,  etc.,  as  well.  In  1913  the  deposits 
in  the  German  co-operative  societies,  building  societies, 
etc.,  were  probably  larger  than  those  contained  in  the 
British  savings  banks. 

The  gigantic  increase  in  Germany’s  wealth  can  also 

be  measured  bv  the  increase  in  the  amounts  insured 

%/ 

against  fire.  In  large  portions  of  Germany  fire  insurance 
is  compulsory  for  all  owners  of  property.  The  amounts 
insured  in  those  districts  in  which  compulsory  insurance 
prevails  have  increased  as  follows : 


368  GERMANY  AND  INDEMNITY  QUESTION 

Compulsory  Fire  Insurance  of  Buildings  only. 


Year. 

Berlin. 

Hamburg. 

Kingdom  of 
Saxony. 

All  Districts 
Subject  to 
Compulsory 
Insurance. 

1868  .  . 
1888  .. 
1906  .. 

31. 

837,000,000 

2,627,000,000 

4,764,000,000 

31. 

449,000,000 

1,213,000,000 

2,507,000,000 

31. 

1,645,000,000 

3,472,000,000 

6,737,000,000 

31. 

9,872,000,000 

20,223,000,000 

37,057,000,000 

Unfortunately,  the  figures  given  are  somewhat  frag¬ 
mentary.  They  are  the  only  ones  which  I  have  been 
able  to  obtain.  They  have  been  extracted  from  the 
Financial  White  Books  published  by  the  German  Govern¬ 
ment  in  1908  in  connection  with  the  projected  reform  of 
the  Imperial  finances.  The  districts  subject  to  compul¬ 
sory  insurance  against  fire  contain  three-eighths  of  the 
population  of  Germany.  Measured  by  the  value  of 
buildings  alone,  the  wealth  of  Germany  has  approxi¬ 
mately  doubled  between  1868  and  1888,  and  has  doubled 
once  more,  roughly  speaking,  between  1888  and  1906. 
That  progress  is  truly  remarkable. 

Up  to  the  outbreak  of  the  War  Germany’s  wealth  had 
been  growing  at  an  extraordinarily  rapid  rate.  In  1913 
Herr  Helfferich,  who  at  that  time  was  a  director  of  the 
Deutsche  Bank,  and  who  during  the  War  became  the 
head  of  the  German  Imperial  Treasury,  estimated  the 
wealth  of  the  German  people  as  follows  in  his  book  Ger¬ 
many's  Economic  Progress  and  National  Wealth: 


Buildings  and  other  property  insured  against  fire 

Land  in  the  country  and  the  towns 

Mines 

Ships,  goods  in  transit  and  metallic  currency  . . 
Public  property,  not  insured  against  fire,  includ¬ 
ing  railways 
Capital  invested  abroad 


£10,000,000,000 

3,500,000,000 

300,000,000 

300,000,000 

1,500,000,000 

1,000,000,000 


Total 


•  • 


•  • 


•  9 


. .  £16,600,000,000 


GERMANY  AND  INDEMNITY  QUESTION  369 


At  the  end  of  his  book  Herr  Helfferich  summed  up 
Germany’s  financial  position  as  follows: 

The  German  national  income  amounts  to  £2,000,000,000 
a  year,  as  compared  with  an  income  of  from  £1,100,000,000 
to  £1,250,000,000  about  the  year  1895. 

Of  these  £2,000,000,000, about  one-sixth,  or  £350,000,000, 
is  devoted  to  public  purposes,  and  about  £1,250,000,000 
is  spent  by  private  individuals.  From  £400,000,000  to 
£425,000,000  are  added  annually  to  the  national  wealth 
by  savings  and  investments,  while  the  national  property 
is  in  addition  increased  by  about  £100,000,000,  owing 
to  the  rise  in  values.  Thus,  altogether  £500,000,000 
are  added  annually  to  the  national  wealth  as  compared 
with  from  £225,000,000  to  £250,000,000  about  the  year 
1898. 

The  national  wealth  of  Germany  amounts  to-day  to 
more  than  £15,000,000,000,  while  it  amounted  only  to 
approximately  £10,000,000,000  about  the  year  1895. 

Before  the  War  the  wealth  of  Great  Britain  was  supposed 
to  amount  to  about  £15,000,000,000,  and  the  British 
national  income  was  calculated  to  reach  £2,000,000,000. 
It  would  therefore  appear  that  Germany  has  in  a  few 
decades  overtaken  great  Britain  not  only  in  industrial 
production,  but  also  in  accumulated  wealth,  and  that  her 
yearly  income,  which  formerly  was  exceedingly  small, 
equalled  in  1913  that  of  the  United  Kingdom.  Other 
German  authorities  have  arrived  at  a  similar  conclusion, 
and  some  of  them  have  endeavoured  to  forecast  the 
future  development  of  the  wealth  of  Germany  and  of 
some  other  countries.  For  instance,  Herr  Steinmann- 
Bucher  wrote  in  his  book  350  Milliarden  Deutsches  Volks- 
vermogen  : 

Formerly  we  were  told  that  the  wealth  of  Germany 
amounted  to  £10,000,000,000,  that  of  France  to 
£10,000,000,000,  and  that  of  Great  Britain  to 
£12,500,000,000.  To-day  we  may  say  that  Germany’s 
wealth  comes  to  £17,500,000,000,  Fiance’s  wealth  at  most 


370  GERMANY  AND  INDEMNITY  QUESTION 


to  £12,500,000,000,  and  that  of  Great  Britain  to 
£16,000,000,000.  In  twenty  years,  in  1930,  Germany 
will  have  a  national  wealth  of  £30,000,000,000,  which 
should  compare  with  a  wealth  of  £15,000,000,000  in  the 
case  of  France  and  of  £21,000,000,000  in  the  case  of 
Great  Britain. 

The  facts  and  figures  supplied  in  these  pages  show  that 
Germany’s  production,  her  trade  and  her  accumulated 
wealth  have  during  the  last  few  decades  grown  with 
extraordinary  rapidity.  According  to  the  high  authority 
of  Herr  Helfferich,  Germany  added  before  the  War  every 
year  £500,000,000  to  her  accumulated  wealth.  That  is  a 
gigantic  surplus.  It  would  therefore  appear  that  Germany 
should  be  able,  if  defeated,  to  pay  a  very  large  War 
indemnity  in  yearly  instalments  by  pledging  her  surplus 
income  for  a  considerable  number  of  years.  As  the 
damage  which  Germany  has  done  to  her  opponents  must 
be  estimated  to  amount  to  at  least  £50,000,000,000,  she 
would  have  to  devote  her  entire  surplus  to  the  payment 
of  a  War  indemnity  during  one  hundred  years.  That 
is  scarcely  a  practicable  proposition.  Besides,  we  must 
doubt  whether  Germany’s  prosperity  would  survive  a 
great  military  defeat.  The  defeat  of  the  German  armies 
might  be  accompanied  by  vast  damage  to  German  pro¬ 
perty  in  the  frontier  districts,  and  it  might  be  followed  by 
civil  war  within  Germany,  by  the  break-up  of  the  German 
Empire,  and  by  considerable  territorial  losses.  The 
retrocession  of  Alsace-Lorraine  to  France  would  deprive 
Germany  of  the  bulk  of  her  iron  ore,  while  the  recreation 
of  an  independent  Poland,  in  accordance  with  the  prin¬ 
ciple  of  nationality,  would  deprive  her  of  the  enormous 
Silesian  coalfield,  which  alone  contains  more  coal  than 
the  whole  of  the  United  Kingdom. 

The  German  people,  if  defeated,  might  conceivably 
have  the  ability  to  pay  a  very  large,  but  scarcely  an 


GERMANY  AND  INDEMNITY"  QUESTION  371 


adequate,  indemnity  out  of  their  yearly  surplus,  but 
would  they  also  have  the  will  to  do  it  ?  It  would  be 
difficult  to  compel  them  to  pay  vast  sums  to  the  Allies 
for  decades,  for  compulsion  would  involve  the  occupation 
of  German  frontier  disticts,  harbours,  coalfields,  etc., 
by  Allied  garrisons  for  an  indefinite  number  of  years. 
Such  an  arrangement  would  mean  a  prolonged  state  of 
bondage  enforced  upon  the  German  people  by  military 
means.  Besides,  if  Germany  were  to  pay  for  the  damages 
done  by  her  troops  out  of  her  yearly  surplus,  the  Allies 
would  have  to  re-establish  Germany’s  prosperity.  Other¬ 
wise  they  could  obtain  only  little  from  the  country. 
As  Germany’s  industrial  prosperity  was  largely  created 
at  the  cost  of  the  other  industrial  States,  the  renewed 
increase  of  the  wealth  of  Germany  would  involve  con¬ 
siderable  loss  to  the  Allies,  a  loss  which  conceivably 
would  be  greater  than  the  monetary  indemnities  which 
might  perhaps  be  obtained  from  her.  In  other  words, 
the  Allies  would  have  to  hand  over  to  Germany  their 
markets  and  part  of  their  industries  in  return  for  utterly 
insufficient  monetary  payments.  They  would  scarcely 
be  prepared  to  re-establish  Germany’s  prosperity  to  the 
harm  of  their  own  industries.  Very  likely  defeat  will 
end  the  German  Empire,  and  will  bring  Germany’s  vast 
prosperity  also  to  an  end.  It  seems  clear  that  Germany 
cannot  pay  an  adequate  monetary  indemnity  if  defeated. 

While  Germany  will  probably  be  unable  to  pay,  after 
an  ultimate  defeat,  an  adequate  indemnity  in  cash,  she 
can  easily  do  so  in  goods.  Her  mineral  resources  alone 
represent,  as  I  have  shown  in  the  preceding  chapter,  a 
value  of  at  least  £237,678,000,000.  By  seizing  the  coal, 
iron  and  oil  resources  of  their  opponents,  and  by  pro¬ 
claiming  that  they  would  retain  them  as  an  indemnity, 
the  Germans  have  created  an  important  precedent  which 
they  may  live  to  regret.  The  Germans  have  endeavoured 


372  GERMANY  AND  INDEMNITY  QUESTION 


to  deprive  France  and  Russia  of  all  coal  and  iron  so  as 
to  make  these  countries  militarily  helpless  and  economi¬ 
cally  dependent  upon  Germany  for  all  time.  The  Germans 
well  understand  the  importance  of  coal  and  iron  in  the 
lives  of  nations.  The  coal  and  iron  beds  are  Nature’s 
power-house  and  Nature’s  arsenal.  They  provide  nations 
with  wealth  and  with  weapons  for  war.  A  nation  can 
more  easily  be  disarmed  by  seizing  its  coal  and  iron  fields 
than  by  dismantling  its  fortresses  and  seizing  its  ships 
and  arms.  Ships,  arms  and  fortresses  may  be  recreated, 
but  coal  and  iron  fields  which  have  been  lost  cannot  be 
replaced.  The  loss  of  these  disarm  nations  for  all  time. 
Those  considerations  which  have  guided  Germany’s 
statesmen  in  their  action  towards  their  opponents,  will 
no  doubt  influence  the  attitude  of  the  statesmen  of  the 
Allied  nations  in  case  of  a  complete  victory.  The  Allied 
statesmen  will  probably  prefer  actual  guarantees  for  the 
maintenance  of  peace  on  the  part  of  Germany  to  paper 
promises.  It  stands  to  reason  that  the  longer  the  War 
will  last,  the  greater  the  damage  done  by  the  German 
armies  will  be,  the  greater  will  be  the  compensation  which 
the  Allies  will  eventually  have  to  claim.  That  considera¬ 
tion  should  be  borne  in  mind  by  the  German  statesmen 
and  business  men  and  by  the  German  nation  as  a  whole. 


CHAPTER  XV 


THE  FUTURE  AND  THE  NATURAL  RESOURCES  OF  THE 

UNITED  STATES 

The  majority  of  English  people  are  so  much  taken  up 
with  current  national  and  local  questions  that  they  can 
give  but  little  time  to  the  consideration  of  the  future. 
If  they  discuss  the  future,  they  rather  discuss  England’s 
future  relations  with  foreign  countries  and  with  the  British 
Dominions  and  Colonies  than  those  with  the  United 
States.  They  rather  reflect  upon  the  position  and  pro¬ 
gress  of  France,  Russia,  Canada,  India,  Persia,  China, 
than  stop  to  think  of  the  probable  development  of  the 
greatest  English  Colony,  the  North  American  Republic. 

What  will  be  the  future  of  the  United  States  ? 

The  future  of  a  State  depends  upon  its  territory  and  its 
natural  resources,  and  upon  the  character  and  policy  of 
the  people.  Compared  with  the  principal  States  of 
Europe,  the  United  States  are  very  sparsely  populated, 
as  will  be  seen  from  the  following  table : 


• 

Square 

Miles. 

Inhabitants. 

Inhabitants 
per  Sq.  Mile. 

United  States  without 
Alaska  (1910)  .. 

2,973,890 

92,027,874 

30-9 

Russia  in  Europe  (1910).  . 

1,909,519 

134,000,000 

61-0 

Spain  (1910) 

194,744 

19,588,688 

100-6 

Hungary  (1910)  .  . 

125,395 

20,886,487 

166-6 

France  (1911) 

207,075 

39,601,509 

191-2 

Austria  (1910) 

115,802 

28,571,934 

246-7 

Germany  (1910)  .. 

208,770 

64,925,993 

311-0 

Italy  (1910) 

110,659 

34,687,000 

313-5 

United  Kingdom  (1911)  . . 

121,371 

45,216,665 

372-6 

373  25 


374  THE  FUTURE  OF  THE  UNITED  STATES 


The  continental  United  States — that  is,  the  United 
States  without  Alaska  and  the  other  outlying  possessions — 
are  50  per  cent,  larger  than  is  European  Russia.  They 
are  fifteen  times  as  large  as  the  German  Empire,  and 
twenty-five  times  as  large  as  the  United  Kingdom.  If 
the  United  States  were  to  become  merely  as  densely 
populated  as  European  Russia,  the  growth  of  which  is 
impeded  by  its  extensive  barren  wastes  and  by  the  scarcity 
of  railways  and  of  roads,  they  would  have  room  for 
200,000,000  inhabitants.  If  they  were  to  become  as 
densely  populated  as  Germany,  which  seems  by  no  means 
impossible,  they  would  have  room  for  nearly  1,000,000,000 
inhabitants.  The  bulk  of  the  United  States  population 
lives  in  the  north-eastern  corner  of  the  Republic,  on,  or 
near  to,  the  Atlantic  coast.  According  to  the  Census  of 
1910  the  centre  of  population  lies  at  Bloomington  in 
Indiana,  between  the  86th  and  87th  degree  of  Western 
longitude,  not  far  from,  and  slightly  east  of,  Chicago. 
How  densely  the  North-Eastern  States  of  the  Union 
are  populated,  if  compared  with  some  of  the  most  fruitful, 
fertile  and  promising  States  in  the  South  and  West,  will 
be  seen  from  the  following  figures : 


Population  per  Square  Mile  in  1910. 


Massachusetts  . . 

..  418*8 

i  Louisiana 

..  36*5 

New  Jersey 

..  337*7 

Washington  . , 

..  17*1 

Connecticut 

..  231*3 

Nebraska 

. .  15*5 

New  York 

. .  191*2 

California 

. .  15*3 

Pennsylvania  . . 

.  171*0 

Texas 

. .  14*8 

Maryland 

. .  130*3 

Florida 

. .  13*7 

Ohio 

..  117*0 

North  Dakota  .. 

. .  8*2 

Delaware 

. .  103*0 

South  Dakota  .  . 

. .  7*6 

Illinois  . . 

.  .  100*6 

Oregon  ..  v. 

..  7*0 

Only  the  three  States  Massachusetts,  New  Jersey  and 
Connecticut  may  be  considered  to  be  densely  populated 
according  to  the  European  standard.  As  these  three 
States  have  together  an  area  of  only  21,455  square  miles, 
they  comprise  only  about  of  the  territory  of  the  Re- 


THE  FUTURE  OF  THE  UNITED  STATES  375 


public.  Except  for  a  few  very  small  patches  which  are 
densely  peopled,  the  United  States  are  much  under¬ 
populated. 

Knowledge  of  the  past  often  enables  one  to  make  a 
forecast  of  the  future.  In  the  past  the  population  of  the 
United  States  has  very  rapidly  increased.  The  rapidity 
of  its  growth  may  perhaps  best  be  gauged  by  comparing 
the  increase  of  the  population  in  the  United  States  with 
that  of  the  United  Kingdom  by  means  of  the  Census 
figures.  Such  a  comparison  yields  the  following  result : 


Population  of — 


The  United  Kingdom. 


1821  .. 

..  21,272,187 

1831  .. 

. .  24,392,485 

1841  .. 

. .  27,036,450 

1851  .. 

. .  27,724,056 

1861  .. 

. .  29,321,288 

1871  .. 

. .  31,845,379 

1881  .. 

.  .  35,241,482 

1891  .. 

.  .  38,104,975 

1901  .. 

. .  41,976,827 

.  1911  .. 

. .  45,216,665 

The  United  States  (without  Alaska 
and  Outlying  Possessions). 


1820 

9,638,453 

1830 

. .  12,860,702 

1840 

.  .  17,036,353 

1850 

..  23,191,876 

1860 

..  31,443,321 

1870 

..  38,558,371 

1880 

..  50,155,783 

1890 

..  62,947,714 

1900 

. .  75,994,575 

1910 

. .  91,972,266 

In  1820-1821  the  population  of  the  United  Kingdom 
was  a  little  more  than  twice  as  large  as  that  of  the  United 
States.  In  1860-1861  the  population  of  the  two 
countries  was  approximately  equal.  In  1910-1911  the 
United  States  had  more  than  twice  as  many  inhabitants 
as  the  United  Kingdom.  In  less  than  a  century,  the 
relative  importance  of  the  two  countries  has  been  com¬ 
pletely  reversed.  While  between  1821  and  1911  the 
population  of  the  United  Kingdom  has  a  little  more  than 
doubled,  that  of  the  United  States  has  grown  more  than 
tenfold.  During  the  last  decennial  intercensus  period 
the  population  of  the  United  Kingdom  has  increased  by 
3,240,000,  while  that  of  the  United  States  has  grown  by 
no  less  than  15,978,000. 


376  THE  FUTURE  OF  THE  UNITED  STATES 


The  population  of  the  United  States  is  increasing  very 
fast  through  natural  increase  and  through  immigration, 
but  the  actual  percentual  increase  has  gradually,  though 
somewhat  irregularly,  declined.  If  we  wish  to  gauge  the 
future  development  of  the  population  of  the  United  States, 
it  is  safest  to  assume  that  the  rate  of  increase  will  continue 
slackening  in  the  same  somewhat  erratic  manner  in  which 
it  has  slackened  hitherto.  A  table  of  the  probable  future 
increase  of  the  American  population  based  on  this  prin¬ 
ciple  has  been  compiled  by  Mr.  Henry  Gannett,  of  the 
United  States  Geological  Survey.  It  shows  the  following 
result : 


Year. 

Population 
of  the 
United 
States. 

Increase 

between 

Decennial 

Periods. 

Y  ear. 

i 

Population 
of  the 
United 
States. 

Increase 

between 

Decennial 

Periods. 

1790 

3,929,214 

Per  Cent. 

1950 

150,000,000 

Per  Cent. 
12 

1800 

5,308,483 

35 

1960 

167,000,000 

10 

1810 

7,239,881 

36 

1970 

184,000,000 

10 

1820 

9,638,453 

33 

1980 

202,000,000 

10 

1830 

12,866,020 

33 

1990 

225,000,000 

11 

1840 

17,069,453 

33 

2000 

249,000,000 

11 

1850 

23,191,876 

36 

2010 

274,000,000 

10 

1860 

31,443,321 

36 

2020 

299,000,000 

9 

1870 

38,558,371 

23 

2030 

325,000,000 

9 

1880 

50,155,783 

30 

2040 

350,000,000 

8 

1890 

62,947,714 

25 

2050 

375,000,000 

7 

1900 

75,994,575 

21 

2060 

400,000,000 

7 

1910 

91,972,266 

21 

2070 

425,000,000 

6 

1920 

104,000,000 

16 

2080 

450,000,000 

6 

1930 

119,000,000 

14 

2090 

475,000,000 

5 

1940 

134,000,000 

13 

2100 

500,000,000 

5 

The  table  given  in  the  foregoing  contains  an  extremely 
cautious  statement  of  the  probable  future  increase  of  the 
American  population.  Between  1900  and  1910  the  popu¬ 
lation  of  the  United  States  increased  by  21  per  cent. 


THE  FUTURE  OF  THE  UNITED  STATES  377 


Assuming  that  in  the  course  of  the  next  five  decades  that 
increase  declines  to  16,  14,  13,  12,  10  per  cent.,  that  it 
remains  approximately  stationary  during  the  six  ensuing 
decades,  and  that  the  increase  of  population  rapidly 
sinks  during  the  nine  following  decades  from  10  per  cent, 
to  only  5  per  cent,  per  decade,  we  find  that  the  population 
of  the  United  States  will  come  to  249,000,000  in  the  year 
2000,  and  to  500,000,000  in  the  year  2100.  Mr.  Gannett’s 
forecast  is  so  cautious  and  conservative  that  it  may  very 
possibly  be  exceeded,  for  if  the  United  States  should 
become  merely  as  densely  peopled  as  European  Russia 
is  at  present,  they  would  have  room  for  200,000,000 
people;  if  they  should  become  as  densely  peopled  as  Spain, 
they  should  have  room  for  300,000,000 ;  and  if  they  should 
become  as  densely  peopled  as  Germany  or  Italy,  they 
should  have  room  for  1,000,000,000  people.  The  United 
States  are  absurdly  thinly  peopled.  California’s  climate 
resembles  that  of  Italy,  and  it  is  50  per  cent,  larger 
than  is  Italy.  However,  while  Italy  has  a  population 
of  34,687,000,  California  has  only  2,377,549  inhabitants. 
Texas  is  30  per  cent,  larger  than  the  German  Empire. 
However,  while  the  German  Empire  had  in  1910  64,925,993 
subjects,  Texas  had  in  1911  only  3,896,542  inhabitants. 

There  is  evidently  no  inherent  improbability  in  the  as¬ 
sumption  that  the  United  States  will  have  250,000,000 
inhabitants  at  a  time  when  children  now  born  have  arrived 
at  a  ripe  old  age ;  that  in  the  year  2000  the  United  States 
will  have  as  many  inhabitants  as  the  United  Kingdom, 
German}^,  France,  Austria-Hungary,  Italy  and  Spain 
combined,  and  that  by  the  year  2100  they  will  have  a 
considerably  larger  population  than  the  Chinese  Empire. 
The  United  States  have  enough  room  for  500,000,000, 
and  probably  for  1,000,000,000  people.  It  is  therefore 
conceivable  that  the  American  people  may  obtain  the 
leadership  of  the  Anglo-Saxon  race  and  the  rule  of  the 


378  THE  FUTURE  OF  THE  UNITED  STATES 


world.  Carthage,  a  Phoenician  colony,  in  course  of  time 
far  outstripped  the  motherland  and  became  the  protec¬ 
tress  of  the  Phoenician  colonies  throughout  the  world. 
Similarly,  the  United  States  may  become  the  protectress 
of  the  Anglo-Saxon  race  throughout  the  world  in  succession 
to  Great  Britain.  The  time  may  come  when  New  York 
will  hold  the  place  of  London,  when  Washington  will  be 
the  capital  of  all  the  Anglo-Saxon  States  and  of  the  world. 
A  hundred  or  two  hundred  years  hence  the  American 
people  may  talk  with  the  same  feelings  of  amused  wonder 
of  the  little  military  States  of  Western  Europe  of  the 
twentieth  century  with  which  men  now  speak  of  the  tiny 
city  States  of  Ancient  Greece  and  of  the  not  much  larger 
Italian  town  republics  of  the  Middle  Ages. 

Whether  the  United  States  will  become  a  State  of 
500,000,000  or  of  a  1,000,000,000  white  people  depends, 
of  course,  not  only  on  the  size  of  the  American  territory, 
which  is  ample,  but  also  on  its  natural  resources.  The 
marvellous  growth  of  the  American  Republic  is  largely 
due  to  immigration.  The  United  States  will  continue 
to  attract  the  emigrants  from  overcrowded  Europe  only 
if  these  can  earn  a  good  living.  If  the  natural  resources 
of  the  United  States  should  prove  insufficiently  attractive, 
or  if  they  should  prematurely  become  exhausted  by 
ruthless  and  wasteful  exploitation,  European  emigrants 
will  go  to  Canada,  South  Brazil,  Argentina,  Australia, 
New  Zealand,  South  Africa,  and  elsewhere,  and  the 
Great  Republic  will  not  dominate  the  world  by  weight  of 
numbers  and  by  its  supremacy  in  wealth  and  power. 

The  natural  resources  of  the  United  States  are  enor¬ 
mous,  and  their  vastness  has  been  the  principal  attraction 
to  European  emigrants.  The  United  States  are  singu¬ 
larly  blessed  with  an  excellent,  healthful,  bracing,  and 
varied  climate  and  an  extremely  fruitful  soil.  On  both 
Oceans  they  have  an  abundance  of  excellent  harbouis. 


THE  FUTURE  OF  THE  UNITED  STATES  379 


The  country  possesses  most  bountiful  mineral  resources 
and  colossal  forests.  It  has  enormous  water-power 
which  can  be  converted  into  electricity  and  which  is 
sufficient  to  drive  all  the  machinery  in  the  land,  and  its 
vast  territory  is  opened  and  made  easily  accessible  to 
man  by  a  unique  chain  of  lakes  and  by  a  most  wonderful 
system  of  rivers  and  streams.  No  less  than  148  streams, 
with  a  total  navigable  length  of  5,365  miles,  wend  their 
way  towards  the  Atlantic;  1,606  miles  of  navigable 
waterways  open  the  United  States  towards  the  Pacific; 
315  miles  of  navigable  rivers,  and  the  vastest  system  of 
interconnected  inland  seas  in  the  world,  open  the  United 
States  towards  Canada;  5,212  miles  of  navigable  rivers, 
exclusive  of  the  Mississippi,  are  tributary  to  the  Gulf 
of  Mexico ;  while  the  Mississippi  system  comprises  no  less 
than  13,912  miles  of  navigable  waterways.  Altogether 
the  United  States  had  in  1910  26,410  miles  of  navigable 
rivers  and  streams.  In  the  same  year  the  United  Kingdom 
had  only  23,387  miles  of  railway.  The  length  of  the 
navigable  waterways  of  the  United  States  is  approximately 
equal  to  the  circumference  of  the  globe. 

The  United  States  have  attracted,  and  will  continue 
attracting,  millions  of  emigrants  from  the  over-populated 
countries  of  the  world — between  1820  and  1910  the  United 
States  have  received  29,784,222  alien  passengers  and  im¬ 
migrants,  and  recently  they  received  on  an  average  about 
800,000  immigrants  per  year — because  the  vast  natural 
resources  of  the  country  yielded  a  good  living  to  all  comers. 
Among  the  nations  of  the  world  the  United  States  are 
at  present  the  largest  producers  of  corn,  wheat,  cotton, 
tobacco,  pigs,  mules,  fish,  fruit,  coal,  iron,  copper,  zinc, 
lead,  petroleum,  natural  gas,  timber,  etc.  Providence 
has  blessed  the  United  States  with  abundance.  As  the 
enormous  prosperity  and  the  rapid  progress  of  the  country 
are  due  to  the  vastness  of  its  natural  resources,  it  is 


380  THE  FUTURE  OF  THE  UNITED  STATES 


obvious  that  their  exhaustion  would  bring  about  its 
decline. 

The  greatness  of  the  productive  power  of  the  United 
States  can  best  be  seen  by  comparison.  By  far  the 
greatest  British  industry  is  the  cotton  trade.  According 
to  the  British  Census  of  Production,  the  yearly  output 
of  the  British  cotton  trade  came  in  1907  to  £132,000,000; 
while  the  output  of  the  second  largest  industry,  the 
coal  trade,  was  officially  valued  at  £119,554,000.  The 
United  States  corn  (maize)  crop — corn  is  mostly  used  for 
stock  feeding — -is  as  a  rule  worth  at  least  £300,000,000 
per  year;  the  production  of  animals  yields,  on  an  average, 
about  £360,000,000  per  year  to  the  American  farmers; 
the  production  of  wheat  and  oats  is  worth  about 
£210,000,000  per  year;  that  of  raw  cotton  and  cotton  seed 
about  £160,000,000  per  year;  that  of  hay  and  forage 
about  £160,000,000  per  year;  milk,  butter  and  cheese 
are  worth  £150,000,000  per  year;  the  production  of  coal 
is  worth  £200,000,000  per  year;  that  of  petroleum, 
£50,000,000  per  year,  etc. 

The  possession  of  raw  materials  enables  a  nation  to 
control  industry.  The  United  States,  producing  the 
bulk  of  the  world’s  cotton,  can,  for  instance,  should  they 
choose  to,  dominate  the  cotton  trade  of  the  world.  The 
extreme  profitability  of  the  possession  of  raw  materials 
may  be  illustrated  by  a  single  example.  The  production 
of  the  American  forests  is  valued  at  £40,000,000  per 
year,  of  which  about  £35,000,000  represent  the  value  of 
timber.  The  timber  is  turned  partly  into  manufactured 
articles  and  partly  into  paper.  The  manufactured 
articles  made  of  wood  are  worth  £150,000,000  per  year, 
and  the  paper  is  worth  £50,000,000  per  year;  while  the 
production  of  the  printing  and  publishing  trade  enhances 
the  value  of  part  of  the  paper  produced  to  £150,000,000 
per  year. 


THE  FUTURE  OF  THE  UNITED  STATES  381 


While  the  rural  industries  of  the  United  States  yield, 
according  to  the  American  Census,  £1,700,000,000  per 
annum,  the  production  of  British  agriculture  in  all  its 
branches  came  in  1909  only  to  £210,000,000,  according  to 
the  British  Census  of  Production.  The  value  of  the 
American  maize  crop  alone  is  50  per  cent,  larger  than  the 
value  of  the  entire  agricultural  production  of  the  United 
Kingdom. 

Although  the  production  of  American  agriculture  is 
enormous,  it  has,  as  regards  monetary  value,  been  rapidly 
overtaken  by  the  manufacturing  industries,  for  these 
have  progressed  much  faster.  While  the  production  of 
American  agriculture  was,  according  to  the  Census  of 
1910,  worth  £1,700,000,000,  that  of  the  manufacturing- 
industries  was  then  worth  £4,135,000,000.  There  can 
be  no  doubt  that  the  economic  balance  in  the  United 
States  has  been  seriously  disturbed ;  that  agriculture 
has  not  kept  pace  with  the  industrial  advance  of  the 
country.  The  United  States  have,  possibly,  not  developed 
their  agriculture  as  much  as  they  might  have  done. 
Thus  they  have  become  a  predominantly  industrial 
State,  and  they  have  been,  and  are  still  to  some  extent, 
neglecting  and  destroying  those  natural  resources  which 
form  the  basis  of  their  prosperity. 

During  many  decades  the  natural  resources  of  the 
United  States  were  far  in  excess  of  the  needs  of  the  people. 
The  immigrants  from  England  found  that  in  the  United 
States  wages  in  general  were  from  two  to  three  times  as 
high  as  in  Great  Britain,  and  that  the  cost  of  the  neces¬ 
sities  of  life — but  not  of  the  luxuries — was  lower.  But 
during  the  last  two  decades  the  inhabitants  of  the  United 
States  have  drawn  lavishly  and  extravagantly  upon 
the  resources  of  Nature.  In  pursuit  of  wealth  they  have 
crowded  into  the  towns.  They  have  recklessly  wasted 
certain  natural  resources;  and  as  agricultural  develop- 


382  THE  FUTURE  OF  THE  UNITED  STATES 


ment  has  not  kept  pace  with  industrial  expansion,  life 
in  the  United  States  is  no  longer  as  easy  and  as  cheap  as 
it  used  to  be.  The  following  table  shows  at  a  glance  the 
relative  progress  of  agriculture  and  of  the  manufacturing 
industries  in  the  United  States : 


Production  of — 


Year. 

Wheat,. 

Corn. 

Cotton. 

Cattle. 

1860  .  . 

173,104,924 

1 

838,792,740 

1 

3,849,469 

25,616,019 

1870  . . 

235,884,700 

1,094,255,000 

4,352,317 

25,484,100 

1880  . . 

498,549,868 

1,717,434,543 

6,605,750 

33,258,000 

1890  .  . 

399,262,000 

1,489,970,000 

8,652,597 

52,801,907 

1900  . . 

522,229,505 

2,105,102,516 

10,245,602 

43,902,414 

1910  . . 

635,121,000 

2,886,260,000 

11,965,962 

69,080,000 

1912  . . 

730,267,000 

3,124,746,000 

14,076,430 

57,959,000 

Year. 

Coal. 

Pig  Iron. 

Copper. 

Population. 

1860 

{Long  Tons). 
13,044,680 

{Long  Tons). 
821,223 

{Long  Tons). 
7,200 

31,443,321 

1870 

29,496,054 

1,665,179 

12,600 

38,558,371 

1880 

63,822,830 

3,835,191 

27,000 

50,155,783 

1890 

140,866,931 

9,202,703 

115,966 

62,947,714 

1900 

240,789,310 

13,789,242 

270,588 

75,994,575 

1910 

447,853,909 

27,303,567 

482,214 

91,972,266 

1912 

491,071,429 

29,727,137 

557,589 

95,410,503 

Since  1860  the  population  of  the  United  States  has 
trebled,  and  agricultural  production  has  apparently 
increased  at  approximately  the  same  ratio,  but  mineral 
and  mining  production  have  increased  very  much  faster. 
During  the  years  under  consideration  the*  production  of 
coal  and  iron  has  increased  nearly  fortyfold  and  that  of 
copper  nearly  eightyfold.  These  marvellous  figures 
give  some  measure  of  America’s  industrial  progress. 


THE  FUTURE  OF  THE  UNITED  STATES  383 


If  we  look  a  little  more  closely  into  the  figures  relating  to 
agricultural  production,  we  find  that  while  the  production 
of  wheat,  corn  and  cotton  has  increased  from  three  to 
fourfold,  the  number  of  cattle  has  only  a  little  more  than 
doubled,  and  has  therefore  increased  far  more  slowly  than 
has  the  population.  Between  1907  and  1912  the  number 
of  cattle  has  declined  from  72,533,996  to  57,959,000. 
This  explains  the  relative  scarcity  and  expensiveness  of 
meat  in  the  United  States  and  in  the  world,  for  America 
is  a  most  important  factor  in  the  world’s  meat-supply, 
and  shows  that  the  recent  scarcity  and  dearness  of  meat 
has  not  been  caused  by  the  American  Beef  Trusts,  as  has 
often  been  asserted. 

The  United  States,  which  formerly  were  principally 
an  agricultural  country,  have  become  in  the  course  of  a 
few  decades  by  far  the  largest  manufacturing  country 
in  the  world.  Not  so  long  ago  the  productiveness  of  the 
farms  and  of  the  factories  was  about  equally  great  in  the 
United  States,  but  now  the  factories  predominate  to 
a  very  marked  extent.  According  to  the  Census  of  1910 
the  production  of  the  United  States  manufacturing 
industries  was  valued  at  $20,672,051,870,  while  the 
production  of  the  farms  came  only  to  $8,498,311,413. 
Cobden  prophesied:  “Great  Britain  is,  and  always  will 
remain,  the  workshop  of  the  world.”  Now  the  United 
States  are  the  world’s  greatest  workshop.  It  is  worth 
noting  that  the  manufacturing  output  of  the  American 
industries,  measured  by  value,  is  at  least  three  times  as 
great  as  is  the  manufacturing  output  of  the  British 
industries. 

Until  lately  the  United  States  were  by  far  the  greatest 
exporters  of  wheat,  meat,  dairy  produce,  etc.,  in  the 
world,  but  now  their  surplus  of  food  is  rapidly  shrinking. 
How  rapidly  it  is  diminishing  will  be  seen  from  the  follow¬ 
ing  figures : 


384  THE  FUTURE  OF  THE  UNITED  STATES 


United  States  Exports  of — 


Year. 

All  Bread- 
Stuffs. 

Animals  of  All 
Kinds. 

All  Meat  and 
Dairy  Produce. 

Dols. 

Dols. 

Dots. 

1902  . . 

213,392,061 

44,871,684 

199,861,378 

1903  . . 

221,391,922 

34,781,193 

179,839,714 

1904  . . 

149,339,106 

47,977,875 

176,027,586 

1905  . . 

110,254,247 

46,728,781 

169,998,873 

1906  .. 

187,457,844 

49,139,568 

210,890,065 

1907  .. 

184,938,043 

41,203,080 

202,392,508 

1908  . . 

215,584,345 

34,101,289 

192,802,708 

1909  . . 

-160,161,624 

22,645,438 

166,521,949 

1910  ., 

133,579,611 

17,447,735 

130,632,783 

1911  . . 

124,913,537 

19,048,653 

149,389,737 

1912  .. 

123,979,715 

15,447,987 

156,260,876 

The  foregoing  figures  show  a  steady  and  continuous 
decline  in  the  exports  of  foodstuffs  if  measured  by  value. 
As  prices  had  considerably  risen  between  1902  and  1912, 
the  decline  would  be  still  greater  if  measured  by  weight. 
The  exports  of  live  cattle,  beef  and  butter  have  diminished 
in  the  most  remarkable  way.  Between  1902  and  1912 
the  exports  of  cattle  have  shrunk  from  $29,902,212 
to  $8,870,075,  those  of  beef  have  shrunk  from  $29,045,056 
to  $1,596,319,  and  those  of  butter  have  declined  from 
$16,002,169  to  $6,092,235.  The  United  States  have  no 
longer  a  huge  regular  surplus  of  cattle,  beef  and  butter, 
and  before  long  they  may  not  produce  sufficient  meat  for 
their  domestic  requirements.  The  United  States  Beef 
Trust  has  for  a  long  time  been  supplying  the  British  market 
with  Argentine  and  Australian  meat,  and  has  been 
shipping  Argentine  and  Australian  meat  to  the  United 
States  as  well.  Notwithstanding  their  enormous  area 
and  relatively  small  population,  the  United  States  are 
in  danger  of  becoming  dependent  upon  foreign  nations, 
not  only  for  part  of  their  meat  and  dairy  produce,  of  which 


THE  FUTURE  OF  THE  UNITED  STATES  385 


already  a  considerable  and  growing  quantity  is  being 
imported,  but  for  their  vegetables,  fruit  and  bread-corn 
as  well.  That,  is  surely  alarming  when  one  bears  in  mind 
that  the  vast  and  fruitful  territory  of  the  United  States 
should  suffice  to  supply  all  the  food  required  by 
500,000,000  people. 

American  statesmen  have  observed  the  course  of  events 
with  serious  misgivings.  They  recognise  that  agriculture 
is  not  sufficiently  productive  in  the  United  States,  partly 
because  the  American  people  flock  to  the  towns,  and 
partly  because  the  American  farmers  have  exhausted 
part  of  the  soil  by  a  somewhat  reckless  exploitation. 
With  similar  recklessness  the  owners  of  the  forests  and 
of  the  mines  have  not  only  exploited,  but  devastated 
the  natural  resources  within  their  reach,  to  the  irreme¬ 
diable  harm  of  the  nation.  Such  developments  are  apt 
to  take  place  in  new  countries,  as  may  be  seen  by  similar 
developments  in  the  British  Dominions. 

The  people  of  the  United  States  have  been  grumbling 
at  the  ever-increasing  cost  of  living.  That  increase, 
though  often  attributed  to  the  Tariff  and  the  Trusts,  is 
no  doubt  principally  due  to  the  waste  and  the  insufficient 
development  of  the  country’s  natural  resources.  Patriotic 
and  far-seeing  Americans  have  begun  to  understand  that 
the  future  greatness  of  their  country  depends  on  the 
preservation  of  its  natural  resources;  that  the  time  is 
past  when  the  natural  resources  of  the  country  could 
safely  be  left  to  unchecked  and  uncontrolled  individuals. 
The  American  people  have  become  aware  of  the  fact  that 
they  must  stop  the  reckless  waste  of  their  greatest  national 
assets.  They  have  begun  to  recognise  that  the  preserva¬ 
tion  of  their  gigantic  natural  resources  is  perhaps  the  most 
important  problem  of  the  Republic ;  that  the  preservation 
of  the  natural  resources  is  a  national  question  which  calls 
for  the  co-operation  of  all  citizens,  regardless  of  party. 


386  THE  FUTURE  OF  THE  UNITED  STATES 


Thus  the  great  movement  for  conserving  and  wisely 
exploiting  America’s  natural  resources  has  arisen. 

The  conservation  movement  in  the  United  States 
was  created  by  scientific  men.  The  first  impetus  was 
~  given  to  the  movement  b}^  the  rapid  reduction  of 
the  American  forests  which  began  to  alarm  far-sighted 
men.  In  the  early  ’seventies  of  the  last  century  it  was 
recognised  that  the  American  forests  would  rapidly  be 
destroyed  unless  their  wasteful  exploitation  was  discon¬ 
tinued.  The  American  Association  for  the  Advancement 
of  Science  presented,  in  1873,  a  memorial  for  the  protection 
of  forests  by  the  State.  Other  memorials  followed,  and 
a  movement  was  set  on  foot  which  resulted  in  the  creation 
of  a  Forestry  Bureau  in  the  Department  of  Agriculture, 
and  in  laws  which  led  to  the  creation  of  the  first  national 
forest  reserve  in  1891. 

President  Roosevelt  took  a  great  interest  in  the  con¬ 
servation  movement.  He  made  numerous  speeches  on 
the  subject,  and  on  January  22,  1909,  he  sent  out  a  most 
memorable  message  on  the  policy  of  conserving  the  national 
resources,  which  the  historian  of  the  future  may  possibly 
place  side  by  side  with  the  Declaration  of  Independence. 
While  the  Declaration  of  Independence  solemnly  affirms 
“  the  unalienable  right  of  men  to  life,  liberty  and  the 
pursuit  of  happiness,”  the  Conservation  Message  affirms 
in  equally  solemn  and  impressive  words  the  right  of  all 
Americans,  born  and  yet  unborn,  to  the  undiminished 
possession  of  their  great  national  heritage.  Mr.  Roose¬ 
velt  stated : 

.  .  .  The  conservation  of  our  resources  is  the  fundamen¬ 
tal  question  before  this  nation,  and  our  first  and  greatest 
task  is  to  set  our  house  in  order  and  to  begin  to  live  within 
our  means. 

The  first  of  all  considerations  is  the  permanent  welfare 
of  our  people,  and  true  moral  welfare,  the  highest  form 


THE  FUTURE  OF  THE  UNITED  STATES  387 


of  welfare,  cannot  permanently  exist,  save  on  a  firm  and 
lasting  foundation  of  material  well-being. 

It  is  high  tiipe  to  realise  that  our  responsibility  to  the 
coming  millions  is  like  that  of  parents  to  their  children, 
and  that  in  wasting  our  resources  we  are  wronging  our 
descendants. 

There  are  differences  of  opinion  as  to  many  public 
questions,  but  the  American  people  stand  nearly  as  a 
unit  for  waterway  development  and  for  forest  protection. 

The  greatest  questions  before  us  are  not  partisan 
questions,  but  questions  upon  which  men  of  all  parties 
and  all  shades  of  opinion  may  be  united  for  the  common 
good. 

The  function  of  our  Government  is  to  ensure  to  all  its 
citizens,  now  and  hereafter,  their  rights  to  life,  liberty 
and  the  pursuit  of  happiness.  If  we  of  this  generation 
destroy  the  resources  from  which  our  children  would  other¬ 
wise  derive  their  livelihood,  we  reduce  the  capacity  of 
our  land  to  support  a  population,  and  so  either  degrade 
the  standard  of  living  or  deprive  the  coming  generations 
of  their  right  to  life  on  this  Continent. 

The  right  of  every  man  to  live  his  own  life,  provide  for 
his  family,  and  endeavour,  according  to  his  ability,  to 
secure  for  himself  and  for  them  a  fair  share  of  the  good 
things  of  existence,  should  be  subject  to  one  limitation 
and  to  no  other.  The  freedom  of  the  individual  should 
be  limited  only  by  the  present  and  future  rights,  interests 
and  needs  of  the  other  individuals  who  make  up  the 
community.  We  should  do  all  in  our  power  to  develop 
and  to  protect  individual  liberty,  individual  initiative, 
but  subject  always  to  the  need  of  preserving  and  promot¬ 
ing  the  general  good.  When  necessary,  the  private 
right  must  yield,  under  due  process  of  law  and  to  a  proper 
compensation,  to  the  welfare  of  the  commonwealth. 

We  are  striving  to  hold  in  the  public  hands  the  remaining 
supply  of  unappropriated  coal,  for  the  protection  and 
benefit  of  all  the  people. 

The  nation,  its  Government  and  its  resources  exist, 
first  of  all,  for  the  American  citizens.  ... 

With  similar  solemn  impressiveness  a  Conference  of 
State  Governors  which  was  held  from  May  13  to  May 


388  THE  FUTURE  OF  THE  UNITED  STATES 


15,  1908,  and  which  was  attended  by  the  Governors 
of  the  individual  States,  the  entire  Cabinet,  the  Justices 
of  the  Supreme  Court,  the  members  of  both  Houses  of 
Congress  and  by  representatives  of  the  great  national 
organisations  of  the  United  States,  placed  on  record  the 
following  declaration: 

We,  the  Governors  of  the  States  and  Territories  of  the 
United  States  of  America,  in  conference  assembled,  do 
hereby  declare  the  conviction  that  the  great  prosperity 
of  our  country  rests  upon  the  abundant  resources  of 
the  land  chosen  by  our  forefathers  for  their  homes,  and 
where  they  laid  the  foundations  of  this  great  nation. 

We  look  upon  these  resources  as  a  heritage  to  be  made 
use  of  in  establishing  and  promoting  the  comfort,  pros¬ 
perity  and  happiness  of  the  American  people,  but  not 
to  be  wasted,  deteriorated  or  needlessly  destroyed. 

We  agree  that  our  country’s  future  is  involved  in  this, 
that  the  great  natural  resources  supply  a  material  basis 
upon  which  our  civilisation  must  continue  to  depend, 
and  upon  which  the  perpetuity  of  the  nation  itself  rests. 

We  agree  in  the  light  of  the  facts  brought  to  our  know¬ 
ledge,  and  from  information  received  from  sources  which 
we  cannot  doubt,  that  this  material  basis  is  threatened 
with  exhaustion.  Even  as  each  succeeding  generation 
from  the  birth  of  the  nation  has  performed  its  part  in 
promoting  the  progress  and  development  of  the  Republic, 
so  do  we  in  this  generation  recognise  it  as  a  high  duty  to 
perform  our  part,  and  this  duty,  in  large  degree,  lies 
in  the  adoption  of  measures  for  the  conservation  of  the 
natural  wealth  of  the  country.  .  .  . 

The  conservation  movement  was  thus  impressively 
launched,  and  it  was  carried  on  not  only  by  scientists 
and  by  the  State  Governors  and  other  officials,  but 
was  enthusiastically  endorsed  by  many  of  the  ablest 
business  men  in  the  United  States.  The  late  Mr.  James 
J.  Hill,  for  instance,  one  of  the  leading  railway  magnates 
in  the  United  States,  and  the  leading  railway  man  in  the 
North-West,  wrote  in  his  book  Highways  of  Progress , 


THE  FUTURE  OF  THE  UNITED  STATES  389 


published  in  1910,  which  was  very  largely  devoted  to  the 
policy  of  conserving  America’s  natural  resources,  as 
follows : 

The  highest  conception  of  a  nation  is  that  of  a  trustee 
for  posterity.  The  savage  is  content  with  wresting  from 
Nature  the  simple  necessaries  of  life.  But  the  modern 
idea  of  duty  is  conservation  of  the  old  and  modelling 
of  the  new  in  order  that  posterity  may  have  a  fairer 
dwelling-place,  and  thus  transmit  the  onward  impulse. 
The  ideal  of  the  prudent,  loving,  careful  head  of  every 
family  is  the  true  ideal  for  a  nation  of  rational  men. 

These  words  form  the  opening  sentences  of  Mr.  Hill’s 
remarkable  book. 

Upon  Mr.  Roosevelt’s  recommendation,  a  Joint  Con¬ 
servation  Conference  was  held  at  Washington  in  December, 
1908.  It  was  attended  by  a  large  number  of  political 
leaders,  delegates  and  the  most  eminent  experts  from  all 
parts  of  the  United  States,  and  it  issued  a  valuable 
Report  in  three  volumes,  which,  in  Mr.  Roosevelt’s 
words,  contains  “the  first  inventory  of  its  natural  re¬ 
sources  ever  made  by  any  nation.”  From  that  Report 
we  learn  how  the  natural  resources  of  the  United  States 
have  been  wasted  in  the  past,  and  how  they  may  be 
preserved  and  increased  in  the  future.  In  its  recommen¬ 
dations  the  formation  of  permanent  Conservation  Com¬ 
missions  in  all  the  individual  States  was  advocated, 
“  to  the  end  that  each  Commonwealth  may  be  aided  and 
guided  in  making  the  best  use  of  those  abundant  resources 
with  which  it  has  been  blessed,”  and  nation-wide  co-opera¬ 
tion  of  all  conservation  agencies  of  the  Union  was  demand¬ 
ed.  Imitation  is  the  sincerest  form  of  flattery.  It  is 
worth  noting  that  the  Canadian  Government  has  taken 
the  greatest  interest  in  the  conservation  movement  in 
the  United  States,  and  that  the  Dominion  has  created  a 

26 


390  THE  FUTURE  OF  THE  UNITED  STATES 


national  Conservation  Commission  and  provincial  Con¬ 
servation  Commissions  of  its  own. 

Hitherto  the  American  farmers  have  only  too  frequently 
“  mined  for  wheat.”  They  have  sown  wheat  year  after 
year  without  endeavouring  to  maintain  the  fertility  of 
the  ground  by  manuring,  rotation,  etc.  Cotton  has 
often  been  grown  in  the  same  short-sighted  and  wasteful 
manner.  Although  great  agricultural  improvements  have 
taken  place  through  the  activity  of  the  excellent  U.S. 
Department  of  Agriculture  and  the  Departments  of 
Agriculture  of  the  individual  States,  in  consequence  of 
reckless  farming  the  produce  of  the  crops  has  gradually 
diminished  in  quantity  and  deteriorated  in  quality  in 
some  of  the  older  States ,  and  when  the  soil  at  last  refused 
to  yield  the  farmers  have  abandoned  the  ruined  land  to 
weeds  and  have  commenced  a  similar  process  of  agricul¬ 
ture,  or,  rather,  of  devastation,  elsewhere.  Thousands 
of  abandoned  farms  may  be  found  in  all  parts  of  the 
United  States,  and  especially  in  the  East.  From  the  last 
four  Decennial  Censuses  of  the  United  States  I  have 
extracted  the  following  significant  figures : 

Acreage  of  Improved  Land  in  Farms. 


States. 

o 

GO 

CO 

rH 

1890. 

1900. 

1910. 

Acres. 

Acres. 

Acres. 

Acres. 

Maine  . . 

3,484,908 

3,044,666 

2,386,889 

2,360,657 

New  Hampshire 

2,308,112 

1,727,387 

1,076,879 

929,185 

Vermont 

3,286,461 

2,655,943 

2,126,624 

1,633,965 

Massachusetts  . . 

2,128,311 

1,657,024 

1,292,132 

1,164,501 

Rhode  Island  . . 

298,486 

274,491 

187,354 

178,344 

Connecticut 

1,642,188 

1,379,419 

1,064,525 

988,252 

Total 

13,148,466 

10,738,930 

3,134,403 

7,254,904 

In  the  six  States  enumerated  the  farming  acreage  has, 
in  the  course  of  thirty  years,  been  reduced  by  5,000,000 


THE  FUTURE  OF  THE  UNITED  STATES  391 


acres,  or  by  almost  40  per  cent.  A  similar  reduction  in 
the  acreage  of  farms  has  taken  place  in  the  States  of  New 
York,  New  Jersey,  Pennsylvania,  Ohio,  Iowa,  Delaware, 
Maryland,  Virginia  and  California. 

Owing  to  the  frequent  disregard  of  rotation  and  the 
neglect  of  manuring,  the  American  soil  yields  compara¬ 
tively  little.  According  to  the  Report  of  the  Conservation 
Committee,  American  and  European  yields  of  wheat 
compare  as  follows : — 

Average  Yield  op  Wheat  per  Acre,  1897-1906. 


United  Kingdom 

32-2  bushels  per  acre. 

Germany 

. .  28-0 

9  9  99 

France 

. .  19-8 

99  99 

Austria 

..  17-8 

9  9  9  9 

Hungary 

. .  17-6 

9  9  9  9 

United  States 

..  13-8 

9  9  99 

The  virgin  soil  of  the  United  States  yields  per  acre  only 
between  one-half  and  one-third  as  much  as  is  yielded  by 
the  inferior,  but  carefully  cultivated,  soil  of  Great  Britain 
and  Germany.  It  is  obvious  that  the  most  careful  and 
the  most  thrifty  cultivation — which,  of  course,  is  difficult 
in  a  country  where  distances  are  great,  land  is  abundant, 
and  labour  dear — would  make  unnecessary  the  abandon¬ 
ment  of  American  farms,  and  would  at  the  same  time 
double  and  treble  the  productivity  of  the  soil. 

It  is  a  well-known  fact  that  waterless  deserts  reclaimed 
by  irrigation  and  swamp  lands  reclaimed  by  drainage 
possess  the  greatest  fertility.  The  United  States  have 
already  more  than  13,000,000  acres  of  irrigated  land. 
The  most  prolific  agricultural  and  fruit-growing  districts 
in  California  and  Utah  were  once  waterless  deserts. 
According  to  the  Statistical  Abstract  of  the  United 
States,  the  Great  Republic  contains  74,541,700  acres  of 
swamp  lands  and  44,375,300  acres  of  irrigable  land  in 
the  arid  region,  or,  together,  118,910,000  acres  which 


392  THE  FUTURE  OF  THE  UNITED  STATES 


await  reclamation.  We  can  safely  estimate  that  at 
least  70,000,000  acres  of  swamps  and  arid  land  can  pro¬ 
fitably  be  converted  into  farms,  meadows,  and  orchards. 
As  the  total  area  of  the  United  Kingdom  is  77,721,256 
acres,  an  area  as  large  as  the  United  Kingdom  can  ap¬ 
parently  be  reclaimed  at  comparatively  trifling  cost. 
In  1909  the  United  States  had  44,262,592  acres  under 
wheat  and  32,043,838  acres  under  cotton.  The  United 
States  can,  by  reclamation  alone,  double  their  wheat  and 
cotton  area,  and  they  can  double  the  output  per  acre  by  a 
more  intensive  cultivation.  The  Report  of  the  Conser¬ 
vation  Commission  stated : 

The  area  of  land  cultivated  may  possibly  be  doubled. 
In  addition  to  the  land  awaiting  the  plough,  75,000,000 
acres  of  swamp  land  can  be  reclaimed,  40,000,000  acres 
of  desert  land  irrigated,  and  millions  of  acres  of  brush  and 
wooded  land  cleared. 

Proper  management  will  double  our  average  yield  per 
acre.  The  United  States  can  grow  the  farm  products 
needed  by  a  population  more  than  three  times  as  great  as 
our  country  now  contains. 

The  harvests  of  the  United  States  are  greatly  diminished 
by  the  ravages  of  vermin,  which  destroy  at  least 
£200,000,000  worth  of  food  per  year.  The  United  States 
Bureau  of  Entomology  estimated  that  the  annual  damage 
by  noxious  insects  to  growing  crops,  fruit-trees,  and  to  grain 
in  storage  is  no  less  than  $659,000,000,  or  £131,000,000, 
a  sum  equal  in  value  to  the  entire  yearly  production  of 
the  greatest  British  industry,  the  cotton  trade.  The 
average  yearly  loss  of  animal  products  from  flies,  ticks 
and  other  insects  is  officially  estimated  at  $267,000,000, 
or  £53,400,000,  a  sum  larger  than  that  which  before  the 
War  Germany  spent  every  year  on  her  enormous  army. 
This  sum  does  not  include  the  enormous  loss  of  human  life 
and  the  cost  of  disease  due  to  house-flies,  mosquitoes. 


THE  FUTURE  OF  THE  UNITED  STATES  393 


fleas  and  other  germ- carrying  insects,  a  loss  much  greater 
than  that  suffered  by  the  live  stock  and  its  products. 
The  Biological  Survey  of  the  Department  of  Agriculture 
estimated  that  the  damage  to  live  stock  and  crops  by 
wolves,  rats,  mice,  and  other  mammals  averages  over 
$100,000,000,  or  £20,000,000  per  year,  a  sum  about  as 
large  as  that  which  before  the  War  was  spent  every  year 
on  the  German  Navy.  The  destructive  activity  of  vermin, 
which  in  many  parts  of  the  United  States  is  extraordinarily 
great,  can  no  doubt  be  diminished  by  appropriate  co¬ 
operative  action. 

The  forests  of  the  United  States  have  been  exploited 
in  the  most  improvident  manner.  Farmers  usually 
begin  operations  by  clearing  the  forest,  by  burning  off 
the  trees  as  if  they  were  worthless;  and  as  forest  fires 
cannot  always  be  controlled,  they  often  destroy  many 
miles  of  forest  against  their  will.  Mr.  W.  B.  Greely, 
of  the  United  States  Forest  Service,  reported:  “Of  the 
total  area  of  improved  farms  in  1907,  not  less  than  65 
per  cent.,  or  290,000,000  acres  (an  area  four  times  as  large 
as  the  whole  of  the  United  Kingdom),  have  been  drawn 
from  the  original  forests  of  the  country.”  Much  timber 
has  been  wasted  by  forest  fires  caused  by  carelessness, 
and  much  has  been  destroyed  by  overtapping  trees  for 
turpentine,  by  the  clumsy  cutting  and  removal  of  trees, 
etc.,  and  the  result  is  that  only  one- third  of  the  timber 
cut  has  actually  been  used,  while  two-thirds  have  been 
wasted.  In  forestry,  as  in  agriculture,  the  United  States 
have  been  drawing  heavily  on  their  capital.  They  have 
been  using  far  more  than  they  have  restored  to  Nature 
owing  to  preventable  waste,  and  the  result  of  their  waste¬ 
fulness  is  that  wood  and  timber,  which  used  to  be  cheap 
and  plentiful,  have  lately  been  scarce  and  dear.  It  is 
clear  that  by  wise  management  the  United  States  could 
greatly  reduce  the  destruction  of  timber,  and  greatly 


394  THE  FUTURE  OF  THE  UNITED  STATES 


increase  its  production  to  their  great  advantage.  The 
Report  of  the  Conservation  Commission  stated : 

.  .  .  Since  1870  forest  fires  have  destroyed  a  yearly 
average  of  fifty  lives  and  $50,000,000  worth  of  timber. 
Not  less  than  50,000,000  acres  of  forest  is  burned  over 
yearly.  The  young  growth  destroyed  by  fire  is  worth 
far  more  than  the  merchantable  timber  burned. 

One-fourth  of  the  standing  timber  is  lost  in  logging. 
The  boxing  of  long-leaf  pine  for  turpentine  has  destroyed 
one- fifth  of  the  forests  worked.  The  loss  in  the  mill  is 
from  one-third  to  two-thirds  of  the  timber  sawed.  The 
loss  of  mill  product  in  seasoning  and  fitting  for  use  is 
from  one-seventh  to  one-fourth. 

Of  each  1,000  feet  which  stood  in  the  forest,  an  average 
of  only  320  feet  of  lumber  is  used. 

We  take  from  our  forests  each  year,  not  counting  the 
loss  by  fire,  three  and  a  half  times  their  yearly  growth. 
We  take  40  cubic  feet  per  acre  for  each  12  cubic  feet 
grown;  we  take  260  feet  per  capita,  while  Germany 
used  37  and  France  25  cubic  feet. 

We  can  practically  stop  forest  fires  at  a  cost  yearly 
of  one-fifth  the  value  of  the  merchantable  timber  burned. 

Under  right  management  our  forests  will  yield  over 
four  times  as  much  as  now. 

Against  an  average  yearly  growth  of  12  cubic  feet  per 
acre  in  the  United  States,  the  forests  in  Germany,  all 
of  which  are  rightly  handled,  yield  each  year  48  cubic  feet 
per  acre,  and  their  most  common  trees  do  not  grow 
naturally  as  fast  as  ours.  It  is  certain  that  the  average 
annual  yield  of  forests  in  this  country  can  be  made, 
through  protection  from  fire  and  through  conservative 
logging,  much  larger  than  that  of  the  forests  in  Germany. 

Every  owner  of  forest  lands  can  stop  fires  and  log 
conservatively  with  immediate  profit,  as  well  as  with 
permanent  profit. 

Most  other  countries  have  already  learned  that  the 
forests  which  are  not  conserved  will  be  used  up,  and  they 
are  taking  care  of  what  they  have.  We  are  among  the 
last  to  learn  it.  We  can  profit  by  that  knowledge  if  we 
will.  But  if  we  will  it  means  action,  united,  vigorous 
and  prompt,  by  State  and  nation. 


THE  FUTURE  OF  THE  UNITED  STATES  395 


The  warnings  and  recommendations  of  the  Conserva¬ 
tion  Committee  have  borne  fruit.  By  suitable  legislation 
much  of  the  waste  of  timber  has  been  stopped.  Forest 
planting  is  taking  place  in  many  parts  of  the  Union, 
and  by  means  of  watch-towers  with  telephonic  or  wireless 
connection  forest  fires  are  now  being  rapidly  detected 
and  promptly  stopped. 

There  are  in  the  United  States  26,410  miles  of  navigable 
waterways.  According  to  the  Report  of  the  Conserva¬ 
tion  Committee  the  length  of  navigable  waterways  can 
be  doubled  by  regulating  the  streams.  In  the  United 
States  transport  by  river  costs  only  about  one-third 
as  much  as  transport  by  railway.  Yet,  except  in  a  few 
instances,  the  great  rivers  are  devoid  of  traffic.  Even  the 
Mississippi,  the  greatest  commercial  waterway  in  the 
world,  is  scarcely  used  for  transportation.  The  water¬ 
ways  of  the  United  States  have  remained  practically 
unutilised,  partly  owing  to  the  lack  of  planful  land  and 
river  regulation,  partly  owing  to  the  hostility  of  the  rail¬ 
ways,  which,  like  the  British  railways,  have  endeavoured 
to  monopolise  the  carrying  trade.  The  American  rivers 
are  a  great  natural  resource  which  at  present  is  largely 
wasted. 

In  consequence  of  the  destruction  of  necessary  forests 
and  of  the  absence  of  river  regulation,  a  large  part  of  the 
most  fruitful  soil  of  the  United  States  is  washed  into  the 
streams  and  carried  by  them  into  the  ocean.  The  Con¬ 
servation  Commission  Report  stated: 

The  direct  yearly  damage  of  floods  since  1900  has 
increased  steadily  from  $45,000,000  to  over  $238,000,000. 
The  indirect  loss  through  depreciation  of  property  is 
great,  while  a  large  loss  arises  in  impeded  traffic  through 
navigation  and  terminal  transfers. 

The  freshets  are  attended  by  destructive  soil  erosion. 
The  soil  matter  annually  carried  into  lower  rivers  and 
harbours,  or  into  the  sea,  is  computed  at  783,000,000 


396  THE  FUTURE  OF  THE  UNITED  STATES 


tons.  Soil  wash  reduces  by  10  or  20  per  cent,  the  pro¬ 
ductivity  of  upland  farms,  and  increases  channel-cutting 
and  bar-building  in  the  rivers. 

Hitherto  river  regulation  and  correction  has  often 
been  effected  rather  for  party-political  than  for  national 
and  economic  purposes.  Hundreds  of  millions  have  been 
wasted  on  purely  political  river  jobs. 

The  owners  of  mines,  petroleum,  natural  gas  and  other 
minerals,  also  have,  to  a  large  extent,  followed  the  policy 
of  economic  vandalism  to  the  harm  of  posterity,  but 
they  will  not  much  longer  be  allowed  to  waste  and  destroy 
resources  which  will  be  necessary  to  future  generations. 
State  and  national  legislation  is  insisting  upon  the  pro¬ 
vident  exploitation  of  the  natural  wealth. 

The  Americans  are  apt  to  treat  their  game  and  fish 
as  they  treat  their  agricultural  soil  and  their  forests. 
They  have  an  inclination  not  to  utilise  their  enormous 
resources  of  game  and  fish,  but  to  exhaust  them  completely. 
In  this  direction  also  the  policy  of  conservation  has  proved 
highly  beneficial. 

The  majority  of  American  houses  are  built  of  wood, 
and  their  roofs  are  made  of  wooden  “  shingles.”  Fires  are 
frequent  in  the  United  States,  for  the  people  are  naturally 
careless  and  insurance  is  general.  The  Report  of  the 
Conservation  Committee  stated: 

A  notable  fact  in  the  analysis  of  fire  losses  is  that  27 
per  cent,  were  caused  through  the  fire  extending  beyond 
the  building  in  which  it  originated.  The  extension  of 
fires  results  from  the  use  of  inflammable  material  in 
construction.  It  is  even  more  notable  that  only 
$68,000,000  of  the  loss  was  on  brick,  concrete,  stone 
and  other  slow-burning  construction,  while  over  double 
that  amount,  or  about  $148,000,000,  was  on  wooden- 
frame  buildings.  In  the  last  thirty-three  years  the 
total  fire  waste  amounted  in  value  of  property  destroyed 
to  over  $4,500,000,000. 


THE  FUTURE  OF  THE  UNITED  STATES  397 


According  to  the  United  States  Insurance  Year-Book, 
the  fire  losses  come  on  an  average  to  $200,000,000,  or  to 
£40,000,000,  per  year.  The  United  States  waste  every 
year  on  preventable  fires  as  much  as,  before  the  War, 
Great  Britain  spent  on  her  Navy,  and  during  the  last 
thirty-five  years  she  has  lost  by  preventable  fires  pro¬ 
perty  valued  at  £900,000,000.  Here  also  improvement 
is  gradually  being  brought  about  by  the  teachings  of  the 
Conservation  Commissions,  which  have  powerfully  in¬ 
fluenced  public  opinion. 

In  the  past  the  American  people  have  exploited  their 
natural  resources  without  a  thought  for  the  morrow. 
They  believed  that  their  natural  resources  were  not 
merely  the  largest  in  the  world,  but  that  they  were 
practically  inexhaustible.  However,  they  have  become 
painfully  aware,  through  a  rise  in  the  price  of  American 
food,  and  of  the  raw  materials  of  their  own  production, 
that  their  great  natural  resources  are  rapidly  diminishing. 
Hence  they  have,  with  their  customary  energy,  created 
a  movement  for  husbanding  and  developing  their  natural 
resources,  and  for  restraining  the  individuals  in  possession 
from  destroying  for  their  personal  profit  resources  which 
should  be  a  common  heritage  for  all  time.  Americans 
are,  above  all,  practical  men  possessed  of  an  open  mind. 
Without  inquiring  too  closely  whether  their  action  is 
individualistic  or  socialistic,  whether  it  meets  with  the 
approval  or  disapproval  of  political  philosophers,  political 
economists,  and  other  doctrinaires  who  do  not  matter, 
they  have  unceremoniously  thrown  overboard  their  old 
policy  of  laissez  faire  in  these  matters,  and  have  intro¬ 
duced  the  German  policy  of  economic  supervision  and  con¬ 
trol  by  the  State,  and  the  policy  of  State  management 
and  State  ownership.  In  future  the  United  States  will 
look  rather  after  the  benefit  of  the  people  as  a  whole, 
and  especially  after  the  welfare  of  the  “  home-makers,” 


398  THE  FUTURE  OF  THE  UNITED  STATES 


in  the  name  of  patriotism,  than  after  the  advantage  of 
enterprising  capitalists  and  speculators  in  the  name  of 
economic  orthodoxy  and  of  unrestrained  individualism, 
which  often  is  merely  a  misnomer  for  unrestrained 
mammonism.  The  Conservation  Commission  has  formu¬ 
lated  its  land  policy  as  follows : 

Good  business  sense  demands  that  a  definite  land 
policy  be  formulated.  The  National  Conservation  Com¬ 
mission  believes  that  the  following  will  serve  as  a  basis 
therefor : 

1.  Every  part  of  the  public  lands  should  be  devoted 
to  the  use  which  will  best  subserve  the  interests  of  the 
whole  people. 

2.  The  classification  of  all  public  lands  is  necessary 
for  their  administration  in  the  interests  of  the  people. 

3.  The  timber,  the  minerals,  and  the  surface  of  the 
public  lands  should  be  disposed  of  separately. 

4.  Public  lands  more  valuable  for  conserving  water- 
supply,  timber  and  natural  beauties  or  wonders  than  for 
agriculture  should  be  held  for  the  use  of  the  people  from 
all  except  mineral  entry. 

5.  Title  to  the  surface  of  the  remaining  non-mineral 
public  lands  should  be  granted  only  to  actual  home¬ 
makers. 

6.  Pending  the  transfer  of  title  to  the  remaining  public 
lands,  they  should  be  administered  by  the  Government, 
and  their  use  should  be  allowed  in  a  way  to  prevent,  or 
control,  waste  and  monopoly. 

The  Conservation  movement  in  the  United  States 
should  be  of  the  greatest  interest  and  of  the  greatest  value 
to  the  British  nation.  It  should  furnish  it  with  an 
invaluable  precedent.  The  British  people  have  in  their 
Dominions  and  Colonies  by  far  the  greatest  estate  in  the 
world.  The  natural  resources  of  the  British  Empire 
are  infinitely  greater  than  those  of  the  United  States. 
National  power  is  based  upon  national  wealth.  Produc¬ 
tion,  wealth,  population,  economic  policy,  will  decide 


THE  FUTURE  OF  THE  UNITED  STATES  399 


whether  the  United  States  or  the  British  Empire  will 
become  the  leading  Anglo-Saxon  Power.  In  the  name 
of  non-interference,  individualism  and  laissez  fair e,  Great 
Britain,  and  the  other  British  States  as  well,  have  wasted 
a  large  part  of  their  natural  resources.  The  British 
people  have  allowed  the  forests  of  the  United  Kingdom 
and  part  of  its  agriculture  to  be  destroyed,  to  the  harm 
of  the  many  and  the  profit  of  the  few.  The  rural  indus¬ 
tries  of  England  might  produce  three  times  as  much 
food  as  they  do  produce.  The  erosion  of  the  coasts 
of  the  British  Isles  continues  unchecked,  swamps  are  not 
drained,  wastes  are  not  reafforested,  the  canal  system 
is  not  recreated,  and  coal  is  exploited  without  a  thought  of 
the  future,  although  the  time  will  come  when  Great  Britain 
will  be  as  poor  in  coal  as  she  now  is  in  timber.  Great 
Britain  is  destroying  her  natural  resources,  although 
there  will  come  a  day  of  reckoning. 

The  future  of  the  United  States  and  of  the  British 
Empire  depends  upon  the  wise  utilisation  and  the  preser¬ 
vation  of  the  natural  resources.  The  future  of  the  Anglo- 
Saxon  race  depends  to  a  large  extent  upon  its  economic 
policy  in  the  widest  sense  of  the  word.  An  inventory 
of  the  resources  of  the  British  Empire  and  an  Imperial 
Conservation  movement  is  required.  The  conservation 
of  the  Imperial  natural  resources  is  well  worthy  a  special 
Imperial  Conference.  The  undiminished  possession  of 
the  vast  natural  resources  of  the  British  Empire  must  be 
safeguarded  to  future  generations  of  the  Anglo-Saxon 
race. 


CHAPTER  XVI 

THE  ECONOMIC  POSITION  AND  FUTURE  OF  RUSSIA 


The  future  development  of  Russia  and  of  Russo- German 
relations  is  a  matter  of  supreme  importance  to  the  nations 
of  Europe  and  of  the  world. 

Modern  Germany,  Prusso- Germany,  was,  rightly  con¬ 
sidered,  not  a  Central  European,  hut  an  East  European 
Power.  It  was  reared  on  Slavonic  soil,  and  its  greatness 
was  based  rather  on  Slavonic  than  on  German  strength. 
During  historic  times  the  Germans  occupied  the  territory 
between  the  Rhine  and  the  Elbe.  East  of  the  Elbe  dwelled 
the  Slavs.  At  an  early  date  the  Germans  began  to  expand 
eastward.  Adventurous  leaders  crossed  the  border,  and 
created  settlements  and  colonies  among  the  heathen  Slavs 
east  of  the  Elbe.  Prussia  proper  lies  east  of  that  great 
river  in  the  old  Slavonic  sphere.  Brandenburg,  Silesia, 
Pomerania,  Mecklenburg,  and  East  Prussia,  which  form 
the  nucleus  of  the  kingdom  of  Prussia,  were  originally 
purely  Slavonic  lands. 

The  Suabian  family  of  the  Hohenzollerns  ruled  with  the 
help  of  a  feudal  nobility,  which  had  migrated  from  Ger¬ 
many  proper,  over  masses  of  people  which,  apart  from 
German  immigrants,  were  non-Germans,  were  aliens  in 
race  and  in  speech,  were  Slavs.  The  Prussian  Slavs  were 
ruled  with  a  hand  of  iron.  They  were  treated  as  serfs, 
and  were  forced  to  fight  against  their  brother- Slavs  for  the 
benefit  of  their  German  masters.  Prussian  absolutism 
arose  owing  to  the  fact  that  the  rulers  of  the  country  were 

400 


RUSSIA’S  POSITION  AND  FUTURE 


401 


able  to  treat  the  native  inhabitants  as  a  conquered  and 
inferior  race. 

In  course  of  time  the  Slavonic  people  of  Prussia  proper 
became  outwardly  Germanised.  However,  they  retained 
their  Slavonic  humility  and  submissiveness.  Prussia  owed 
its  greatness  to  the  fact  that  its  German  rulers  could,  with 
the  help  of  their  German  feudal  retainers,  who  later  on 
were  replaced  by  officials,  organise,  arm,  and  drill  the  ser¬ 
vile  and  largely  alien  population,  which  furnished  the  most 
excellent  food  for  cannon.  For  centuries  the  Prussian 
sword  has  been  wielded  largely,  and  perhaps  chiefly,  by 
Slavonic  hands  under  the  direction  of  German  rulers  and 
officers. 

Prusso-Germany  has  been  defeated,  but  the  Germans 
may  wish  to  take  up.  once  more  their  career  of  conquest 
and  of  expansion,  whereby  they  have  grown  great  in  the 
past.  As  they  cannot  easily  expand  towards  the  west  and 
south,  they  may  endeavour  to  expand  towards  the  east. 
They  may  endeavour  to  increase  their  power  and  wealth 
once  more  with  the  help  of  the  Slavonic  peoples  and  at  the 
cost  of  the  Slavs. 

The  great  distinguishing  trait  of  the  Northern  and 
Eastern  Slavs  is  their  submissiveness.  While  the  South¬ 
ern  and  Western  Slavs,  the  Poles,  the  Serbians,  and  the 
Czechs,  have  in  the  past  displayed  a  strong  love  of  freedom 
and  independence,  and  have  fought  with  the  utmost  de¬ 
termination  against  foreign  conquerors  and  foreign  influ¬ 
ences,  the  Russian  Slavs  have  readily  submitted  to  alien 
rule.  Patient  submissiveness,  an  absolutely  Oriental 
fatalism,  and  a  dreamy,  indolent  passivity,  are  preached 
as  virtues  by  countless  Russian  poets,  novelists,  and 
moralists.  These  qualities  are  perhaps  the  most  striking 
characteristic  of  the  Russian  race.  The  Russians  lived 
under  the  yoke  of  the  Normans,  the  Varagi,  from  862  to 
1054,  under  their  own  Princes  from  1054  to  1238,  and  under 


402  RUSSIA’S  POSITION  AND  FUTURE 


the  Mongol  hoiror  from  1240  to  1462.  Since  then  they 
have  equally  patiently  submitted  to  the  tyranny  of  alien 
rulers — of  the  Ruriks  and  of  the  Romanoffs,  of  the  Hol¬ 
stein- Gottorps  and  of  the  Bolsheviks.  Men  of  such  pli¬ 
ability  form  ideal  material  in  the  hands  of  a  race  of  ambi¬ 
tious,  energetic,  and  ruthless  organisers  and  conquerors. 

Influential  political  thinkers  and  writers  in  Germany 
have  advocated  for  many  years  that  Germany  should 
divide  Russia  against  herself,  bring  the  various  portions 
under  German  domination,  and  make,  in  course  of  time, 
the  whole  country  a  gigantic  German  protectorate  and 
colony.  That  idea  dictated  the  stipulations  of  the  peace 
of  Brest-Litovsk,  whereby  the  newly  created  Russian 
border  States  in  the  west,  with  a  population  of  more  than 
60,000,000,  were  given  a  sham  independence  under  the 
German  Government,  were  made  German  protectorates. 
The  absorption  of  these  border  States  by  a  victorious 
Germany  which  had  already  begun  would  in  course  of  time 
probably  have  been  followed  by  that  of  the  remaining 
parts  of  Russia  as  well.  Exactly  as  in  previous  centuries 
a  Greater  Prussia  had  been  built  up  on  a  broad  Slavonic 
foundation,  even  so  a  Greater  Germany  might  have  been 
created  which,  in  course  of  time,  would  have  extended 
from  the  French  frontier  to  Vladivostok  and  to  the  Behring 
Strait,  and  from  the  Arctic  Circle  to  the  borders  of  India 
and  China.  Countless  German  publications  which  were 
issued  during  the  War  recommended  the  gradual  absorp¬ 
tion  of  all  Russia.  Compared  with  such  an  Empire,  the 
projected  Central  European  Federation,  dominated  by 
Germany  and  extending  deeply  into  Asia  Minor  and  Africa, 
would  have  seemed  an  unimportant  creation. 

In  view  of  Prusso-Germany’s  tradition  of  conquest  based 
upon  the  exploitation  of  Slavonic  man-power  and  Slavonic 
stolid  submissiveness,  and  in  view  of  the  fact  that  the 
Russian  Slavs  have  readily  and  cheerfully  submitted  to 


RUSSIA’S  POSITION  AND  FUTURE  403 


alien  rule  in  the  past,  it  is  worth  while  considering  in  some 
detail  the  possibility  and  consequences  of  Russia  drawing, 
or  being  drawn,  towards  Germany,  of  Russia  becoming  a 
German  preserve  and  a  German  possession. 

Germany  lost  the  War  owing  to  military  defeat  and 
owing  to  the  effect  of  the  blockade.  She  lost  the  War 
owing  to  an  insufficiency  of  man- power  and  an  insufficient 
supply  of  indispensable  raw  materials  and  of  food.  Russia 
can  supply  Germany  with  all  the  soldiers,  food,  and  raw 
materials  which  her  most  ambitious  soldiers  may  wish  for 
in  their  wildest  dreams.  The  vastness  of  Russia  and  of 
her  resources  and  possibilities  are  realised  only  by  the 
few.  The  size  of  the  country  may  be  gauged  from  the 
following  figures,  which  are  taken  from  the  British  Statis¬ 
tical  Abstract  for  Foreign  Countries : 

Square  Miles. 


Total  Russian,  Empire  in  1914  . .  . .  7,889,459 

European  Russia  only  in  1914  .  .  . .  1,909,519 

China  . .  . .  . .  . .  . .  . .  3,924,837 

Brazil .  3,290,564 

United  States  proper  . .  . .  . .  . .  2,973,890 

German  Empire  in  1914  .  .  . .  . .  208,770 


The  Russian  Empire  as  it  existed  in  1914  was  by  far  the 
largest  connected  State  in  the  world.  All  Russia  was  forty 
times  as  large,  and  European  Russia  alone  ten  times  as 
large,  as  the  German  Empire.  According  to  other  authori¬ 
ties,  the  British  official  figures  give  an  understatement  of 
Russia’s  area.  Baron  A.  Hey  king,  the  former  Russian 
Consul-General  in  England,  wrote  in  his  book  Problems 
Confronting  Russia: 

Extending  over  half  of  the  Continent  of  Europe  and  a 
third  of  Asia,  Russia  comprised  before  the  War  a  continu¬ 
ous  area  of  not  less  than  8,760,000  square  miles.  This 
area  stretched  over  163  geographical  degrees  from  west  to 
east,  and  over  35  degrees  from  north  to  south.  Russia  is 
arger  than  the  United  States,  Canada,  and  India  com- 


•  404 


RUSSIA’S  POSITION  AND  FUTURE 


bined;  she  is  more  than  twice  the  size  of  the  whole  Conti¬ 
nent  of  Europe.  Her  population  of  186  million  inhabi¬ 
tants  is  equal  to  that  of  the  whole  of  the  American  conti¬ 
nent  (North  and  South)  and  Australia  taken  together,  or 
that  of  the  combined  population  of  the  United  Kingdom, 
France,  J apan,  and  Italy.  It  exceeds  the  aggregate  black 
and  white  population  of  Africa;  also  that  of  the  United 
States  and  Germany  taken  together. 


The  widely  held  belief  that  Russia  is  a  cold  and  barren 
country  situated  in  the  extreme  north  is  erroneous.  Russia, 
like  the  United  States,  comprises  nearly  all  climes  except 
the  torrid.  Moscow  and  Riga  in  the  north  lie  in  the  same 
latitude  as  Glasgow  and  Copenhagen;  Kiev  and  Charkoff 
in  the  centre  are  no  farther  north  than  Frankfurt- on- the- 
Main  and  the  Isle  of  Wight;  Odessa  and  Rostoff  lie  in  the 
same  latitude  as  Venice  and  Lyons;  the  Southern  Crimea 
in  the  same  latitude  as  the  Italian  Riviera ;  Tiflis,  Khiva, 
and  Bakou,  are  in  the  same  latitude  as  Constantinople, 
Naples,  Lisbon,  and  Washington;  Southern  Turkistan  in 
the  same  latitude  as  Southern  Italy,  Athens,  Tunis,  and 
Los  Angeles. 

Not  so  very  long  ago  the  population  of  France  greatly 
exceeded  that  of  Russia.  The  vastness  of  Russia  and  of 
its  resources  has  enabled  the  population  to  increase  at  an 
extraordinary  speed  as  follows: 


Year. 

1762 

1796 

1815 

1835 

1859 

1897 

1913 


Population. 

19,000,000 

36,000,000 

45,000,000 

60,000,000 

74,000,000 

129,209,297 

174,099,600 


The  strength,  wealth,  and  populousness  of  a  State  depend 
on  its  natural  resources,  by  the  exploitation  of  which  men 
live  and  multiply.  Russia  suffers  from  the  fact  that  a 


RUSSIA’S  POSITION  AND  FUTURE 


405 


large  part  of  the  county  lies  in  the  nnhospitable  north. 
However,  that  disadvantage  is  compensated  for  by  great 
natural  advantages.  The  great  bulk  of  Russia  is  a  gi¬ 
gantic,  monotonous  plain,  which  is  intercepted  by  a  few 
mountain  chains.  As  agriculture  requires  level  ground,  it 
is  exceedingly  favourably  situated  for  the  pursuit  of  the 
rural  industries. 

A  huge  inland  country  requires  opening  up  by  railways 
and  waterways,  and  the  latter  afford  a  cheaper  means  of 
transport  than  the  former.  Russia  is  an  ideal  country  for 
the  development  of  inland  transport  by  land  and  water. 
The  level  country  makes  railway  construction  and  trans¬ 
port  relatively  cheap,  and  Russia’s  system  of  natural 
waterways  is  unequalled  in  the  world.  Russia  is  the  land 
of  huge  rivers  which  flow  gently,  almost  without  a  gradient, 
towards  the  sea.  Of  the  principal  rivers,  the  Volga  is 
2,325  miles  long,  the  Dnieper  1,410  miles  long,  and  the 
Don  1,325  miles  long,  while  the  Rhine  measures  only  850 
miles  and  the  Thames  only  209  miles.  The  basin  drained 
by  the  Volga  alone  comprises  563,000  miles,  an  area  five 
times  as  large  as  the  whole  of  the  United  Kingdom,  the 
Dnieper  system  drains  202,140  miles,  and  the  Don  system 
166,000  square  miles.  Russia  has  153,782  miles  of  rivers, 
canals,  and  lakes,  a  mileage  which  is  four  times  as  great  as 
that  of  the  railways  of  India.  Of  these  waterways,  20,670 
miles  are  navigable  for  steamers,  7,482  miles  for  small 
sailing  vessels,  and  88,739  miles  for  rafts. 

The  capacity  of  Russia’s  river  craft  exceeded  in  1906 
13,000,000  tons,  a  tonnage  which  vastly  exceeded  that  of 
the  German  merchant  marine  in  1914.  From  the  centre 
of  European  Russia,  from  a  plateau  which  is  situated  only 
a  few  hundred  feet  above  the  level  of  the  sea,  the  great 
Russian  rivers  flow  gently  towards  the  south,  west,  north, 
and  east.  They  have  been  connected  by  canals.  Conse¬ 
quently  one  can  travel  by  water  from  one  part  of  the 

27 


406 


RUSSIA’S  POSITION  AND  FUTURE 


Empire  to  almost  any  other  part.  Owing  to  the  fact  that 
all  European  Russia  is  a  plain,  and  that  the  river  and  canal 
system  can  be  vastly  improved  at  comparatively  small 
expense,  natural  conditions  favour  the  development  of 
inland  transport  in  Russia  as  in  few  other  countries.  In  a 
few  decades  Russia  might  conceivably  have  the  finest 
system  of  railways  and  of  inland  waterways  in  the  world, 
and  might  cease  to  be  an  ice  bound  country  during  the 
long  winter. 

Northern  Russia  is  bitterly  cold,  but  it  is  by  no  means 
valueless.  In  the  great  northern  belt  of  European  and 
Asiatic  Russia  are  to  be  found  by  far  the  largest  and  the 
wealthiest  forests  in  the  world.  Much  of  that  land  has  not 
yet  been  touched  by  the  axe,  and  has  not  even  been  sur¬ 
veyed.  Its  exploitation  requires  the  provision  of  those 
transport  facilities  which  as  yet  are  lacking.  Russia  has 
an  inexhaustible  store  of  pine,  fir,  cedar,  larch,  birch,  oak, 
elm,  beech,  etc.  In  European  Russia  alone  there  are 
550,000,000  acres  of  forests,  an  area  which  is  seven  times 
as  large  as  that  of  the  United  Kingdom.  Before  the  War 
Russia’s  exports  of  timber  ranged  immediately  after  her 
grain  exports,  and  half  of  the  timber  imported  by  Great 
Britain  came  from  Russia.  By  means  of  her  forests 
Russia  may  obtain  not  only  the  largest  timber  and  wood¬ 
working  industries  in  the  world,  but  the  largest  paper¬ 
making  industry  as  well. 

In  the  intermediate  belt  Russia  produces  gigantic  quan¬ 
tities  of  wheat,  rye,  oats,  barley,  beetroot,  mangold,  rape, 
hemp,  flax,  apples,  pears,  plums,  cherries,  etc.,  and  in  the 
southern  territories  she  raises  an  abundance  of  maize, 
rice,  cotton,  jute,  tobacco,  tea,  almonds,  pistachios,  pome¬ 
granates,  oranges,  mandarins,  apricots,  peaches,  and 
grapes,  large  quantities  of  which  are  converted  into  still 
and  sparkling  wines. 


RUSSIA’S  POSITION  AND  FUTURE 


407 


Russia’s  food-production  per  acre  is  exceedingly  low. 
because  the  great  majority  of  the  peasants  merely  scratch 
the  ground  with  light  implements,  and  scientific  manur¬ 
ing,  etc.,  is  little  known.  Germany,  Belgium,  and  Great 
Britain  produce  per  acre  about  three  times  as  much 
cereals,  potatoes,  and  vegetables  as  does  Russia.  Conse¬ 
quently  Russia’s  production  could  be  doubled  and  trebled, 
without  extending  her  agricultural  area,  merely  by  improv¬ 
ing  the  methods  of  cultivation.  Notwithstanding  her 
primitive  agricultural  methods,  Russia  produces,  according 
to  Baron  Heyking,  51  per  cent,  of  the  world’s  rye,  25  per 
cent,  of  the  world’s  oats,  33  per  cent,  of  the  world’s  barley, 
22  per  cent,  of  the  world’s  wheat,  etc.  As  all  of  Russia 
is  a  gigantic  plain  which,  but  for  the  intersection  of  the 
Ural  and  Altai  Mountains,  stretches  from  the  German 
frontier  to  the  Pacific  Ocean,  the  country  may,  and  in 
course  of  time  should,  become  by  far  the  largest  agricul¬ 
tural  producer  and  exporter  in  the  world.  Compared  with 
Russia’s  agricultural  possibilities,  those  of  the  United 
States,  Canada,  and  Argentine,  appear  small. 

Notwithstanding  the  backwardness  of  her  rural  indus¬ 
tries,  Russia  had  in  1913  33,863,000  horses,  51,355,000 
cattle,  73,962,000  sheep,  and  14,232,000  pigs.  She  was 
far  ahead  of  the  United  States  both  in  horses  and  in 
sheep,  and  had  almost  as  many  head  of  cattle,  but  was 
far  inferior  to  the  United  States  in  pigs.  By  opening 
up  the  country  by  means  of  roads  and  railways  and  by 
improving  her  agricultural  processes,  Russia  can  increase 
indefinitely  her  production  of  food  and  of  animals  of  every 
kind. 

In  some  directions  Russian  agricultural  production 
has  advanced  most  remarkably,  as  the  following  figures, 
which  are  taken  from  the  French  Annuaire  Statistique, 
show : 


408  RUSSIA’S  POSITION  AND  FUTURE 


Harvest  of  European  Eussia  only,  without  Poland. 


Y  car. 

1 

Wheat. 

I 

Oats. 

Potatoes. 

Hectolitres. 

Hectolitres. 

Hectolitres. 

189.3 

130,400,000 

228,300,000 

204,100,000 

1898 

142,500,000 

186,600,000 

241,700,000 

1903 

199.600,000 

270,900,000 

262,300,000 

1908 

171.100,000 

241,200,000 

262,900,000 

1913 

303,900,000 

1 

296,000,000 

336,200,000 

Y  ear. 

Horses. 

Cattle. 

■ 

1870  . 

15,611,000 

21,409,000 

1880  . 

20,016,000 

23,845,000 

1890  . 

19,663,000 

24,609,000 

1900  . 

19,682,000 

32,913,000 

1910 . 

20,961,000 

• 

31,473,000 

The  figures  given  show  a  remarkable  expansion,  which 
promises  well  for  Russia’s  agricultural  future.  Particu¬ 
larly  remarkable  is  the  advance  made  by  Russia  in  the  pro¬ 
duction  of  beet-sugar  and  of  cotton.  In  the  production 
of  the  former  she  seems  likely  to  overtake  Germany,  and 
in  that  of  the  latter  she  has  rapidly  overtaken  that  of 
Egypt,  as  appears  from  the  following  tables,  which  are  taken 
from  the  British  Statistical  Abstract : 


Beet-Sugar  Production  in  Tons. 


Year. 

In  Germany. 

In  Eussia. 

1897-98 

1,814,758 

744,159 

1902-03 

2,265,246 

1,020,953 

1907-08 

2,104,358 

1,522,384 

1910-11 

2,548,246 

1,888,806 

1913-14 

2,738,000 

1,750,000 

RUSSIA’S  POSITION  AND  FUTURE 


409 


Cotton -Production  in  Bales. 


¥  ear. 

In  Egypt. 

In  Asiatic  Russia. 

19)2 . 

1,262,000 

426,000 

1905  . 

1,251,000 

612,000 

1908  . 

1,433.000 

1,069,000 

1901 . 

991,000 

1,974,000 

Russia’s  tobacco-production  is  very  large.  Her  acreage 
under  that  plant  is  the  second  in  the  world. 

The  vast  inland  waters  of  Russia,  especially  the  Caspiau 
region,  abound  in  fish. 

The  widely  held  belief  that  Russia  is  naturally  poor  in 
minerals  is  erroneous.  Although  the  gigantic  country  has 
not  yet  been  adequately  surveyed  and  explored,  vast 
mineral  deposits  have  been  found.  Russia  is  rich  in  coal, 
iron  ore,  manganese,  copper,  gold,  platinum,  asbestos,  salt, 
naphtha,  and  many  other  minerals.  The  coal  and  iron 
resources  of  Russia  compare  as  follows  with  those  of  the 
United  Kingdom  according  to  the  Reports  placed  before 
the  International  Geological  Congresses  held  in  Canada  in 
1913  and  in  Stockholm  in  1910: 


Coal. 


European  Russia  Tons. 
and  Siberia  . .  233,985,000,000 

United  Kingdom  189,535,000,000 


Metallic  Iron  contained  in 
Iron  Ore. 


European  Russia  Tons. 
only  . .  . .  387,200,000 

United  Kingdom  455,000,000 


As  prospecting  for  minerals  has  scarcely  begun,  the 
mineral  discoveries  of  the  future  may  far  exceed  those  of 
the  past. 


410  RUSSIA’S  POSITION  AND  FUTURE 


In  spite  of  a  clumsy  legislation,  a  wretched  Administra¬ 
tion,  a  bad  inland  transport  system,  ai*d  other  hampering 
circumstances,  Russia’s  mineral  production  has  rapidly 
increased  as  follows  : 


Production  of — 


Y  ear. 

Coal. 

Iron  Ore. 

Copper. 

Zinc. 

Tons. 

T071S. 

Tons. 

Ton*. 

1883 

3,980,000 

998,000 

4,356 

4,185 

1893 

6,922,000 

1,958,000 

5,348 

4,522 

1903 

16,868,000 

4,152,000 

8,922 

9,737 

1913 

33,150,000 

8,200,000 

33,695 

11,600 

Year. 

Gold. 

Platinum. 

Naphtha. 

Salt. 

Kilos. 

Kilos. 

Tons. 

Tons. 

1883 

35,734 

3,536 

989,000 

1,138,000 

1893 

44,804 

5,094 

5,434,000 

1,337,000 

1903 

41,200 

5,911 

9,624,000 

1,645,000 

1913 

60,847 

4.898 

9.193,000 

1,906.000 

During  the  thirty  years  under  consideration  the  produc¬ 
tion  of  coal,  iron  ore,  and  copper,  has  increased  about  eight¬ 
fold,  that  of  zinc  threefold,  and  that  of  gold  and  salt  has 
nearly  doubled.  Russia  has  practically  a  monopoly  in 
platinum,  the  most  valuable  of  metals.  She  produces 
about  one-fourth  as  much  gold  as  South  Africa.  She  is 
the  second  largest  producer  of  mineral  oil,  and  her  produc¬ 
tion  of  copper  promises  soon  to  exceed  that  of  Germany 
and  even  that  of  Spain. 

Those  Russian  industries  which  employ  minerals  have 
rapidly  progressed,  as  the  following  examples  show . 

In  1913  Russia’s  production  of  steel  exceeded  that  of 
France.  The  mineral  and  industrial  possibilities  of 


RUSSIA’S  POSITION  AND  FUTURE  411 

R  ussia  are  possibly  as  great  as  her  agricultural  and  forestral 
ones. 


Production  of — 


Y  ear. 

Pig  Iron. 

Iron  and  Steel. 

Tons. 

Tons. 

1883  . 

482,000 

578  000 

1893  . 

1,029,000 

793.000 

1903  . 

2,488,000 

2,226.000 

1913  . 

4,600,000 

4,015.000 

Mineralogically,  as  agriculturally,  the  soil  of  Russia  has 
been  merely  scratched.  An  incapable  and  corrupt  Admin¬ 
istration  has  kept  back  the  development  of  the  great 
national  resources.  The  opening  up  of  the  country  by 
the  provision  of  adequate  roads,  railways,  and  waterways, 
and  the  introduction  of  better  methods  of  production  in 
agriculture,  mining,  and  manufacturing,  should  vastly 
increase  the  wealth  of  the  nation.  During  the  last  hundred 
years  Russia’s  population  has  been  exactly  quadrupled. 
The  increase  of  men  depends  on  the  increase  in  the  pro¬ 
duction  of  those  goods  which  afford  them  a  living.  There 
is  no  reason  to  doubt  that  Russia’s  population  may  in¬ 
crease  fourfold  during  the  next  hundred  years  if  the  great 
latent  resources  of  the  country  are  adequately  utilised. 
It  is  perfectly  possible  that  in  the  year  2020  Russia  within 
the  limits  of  1914  will  have  a  population  of  more  than 
700,000,000.  It  follows  that  the  acquisition  of  that 
country  in  some  form  or  other  would  enable  Germany  to 
dominate  the  world  militarily,  financially,  and  industrially. 

Russia’s  most  urgent  need  is  probably  the  opening  up 
of  the  country  by  railways  and  waterways,  and  by  roads 
which  act  as  feeders  to  both.  She  is  very  poorly  provided 
with  roads  and  railroads  The  area  of  Russia  is  nearly 


412 


RUSSIA'S  POSITION  AND  FUTURE 


three  times  as  great  as  that  of  the  United  States  proper; 
yet  the  mileage  of  railways  is  five  times  as  great  in  the 
United  States  as  in  Russia.  Gigantic  Siberia,  which  is 
twice  as  large  as  the  United  States,  has  only  a  single  rail- 
way-line.  Along  that  railway  there  are  settlements  of 
men.  All  the  rest  of  the  huge  country  is  a  wilderness. 
The  building  of  a  sufficiency  of  railways  would  vastly 
benefit  not  only  Russia's  agriculture,  forestry,  mining, 
and  her  industries  in  general,  but  particularly  those  in¬ 
dustries,  Russian  or  non-Russian,  which  have  to  provide 
the  millions  of  tons  of  rails  and  the  rolling  stock,  etc.,  which 
are  required.  The  growth  of  the  Russian  railway  system 
in  the  past  gives  one  an  idea  of  its  possible  development 
in  the  future.  The  mileage  of  the  railways  of  European 
Russia  has  increased  as  follows : 


Year. 

1860 

1870 

1880 

1890 

1900 

1910 

1912 


Kilometres. 

1,691 

11,236 

23,524 

30,940 

48,107 

59,559 

61,861 


Russia  is  by  far  the  largest  connected  State  in  the 
world.  Her  forestal,  agricultural,  mineral,  and  industrial 
potentialities  are  absolutely  unlimited.  Russia  might 
become  the  foremost  State  in  the  world  in  population,  in 
agricultural,  mineral,  and  industrial  production,  and  in 
wealth.  Her  exports  of  agricultural  products,  minerals, 
and  manufactures,  might  exceed  those  of  the  United 
States.  Russia  might  become  not  only  the  wealthiest  and 
the  most  populous  country  in  the  world,  but  also  the  most 
powerful,  for  military  power  is  based  on  population  and 
wealth.  Hence  its  acquisition  in  one  form  or  another  is 
bound  to  appear  most  alluring  to  all  Germans  who  have 


RUSSIA’S  POSITION  AND  FUTURE 


413 


the  greatness  of  their  country  at  heart,  who  have  been 
brought  up  in  the  tradition  of  conquest,  and  who  desire  to 
resume  their  triumphant  expansion  of  their  country.  The 
military  men  of  Germany  are  bound  to  see  in  Russia  an 
inexhaustible  reservoir  of  men  and  of  horses,  of  food,  and 
of  those  raw  materials,  such  as  leather,  cotton,  copper,  etc., 
which  densely  populated  Germany  would  require  in  case  of 
war.  The  German  business  men  must  be  equally  tempted 
to  attach  Russia  to  Germany  in  some  way,  for  they  are 
bound  to  see  in  that  country  an  inexhaustible  source  of 
wealth  for  themselves  and  for  their  workers.  The  German 
business  men,  while  developing  Russia  to  the  great  ad¬ 
vantage  of  the  native  inhabitants,  might  secure  the  prin¬ 
cipal  benefit  for  their  own  countrymen.  The  German 
officials  and  the  German  intellectuals,  professors,  profes¬ 
sional  men,  etc. ,  might  enrich  themselves  by  lifting  up  the 
Russians.  The  building  and  equipping  of  200,000  miles 
of  railway  alone  would  ensure  the  unbounded  prosperity 
of  the  German  iron  and  steel  industry  and  of  the  indus¬ 
tries  connected  with  it  for  decades.  By  skilful  and  tactful 
management  the  bulk  of  Russia’s  wealth  might  peacefully 
be  transferred  to  Germany.  Almost  unnoticed,  Russia 
might  become  a  German  protectorate. 

The  Germans,  and  especially  the  Prussians,  have  seen 
for  centuries  in  Russia  a  German  colony.  Centuries  ago, 
when  Poland  was  a  powerful  and  wealthy  military  State, 
Russia  had  not  yet  become  an  Empire  and  Prussia  had  not 
yet  become  a  kingdom.  Both  were  weak  and  poor,  and 
both  feared  the  Poles.  The  Grand  Masters  of  the  Teutonic 
Order  which  ruled  Prussia  felt  threatened  by  Poland. 
They  sought  protection  against  the  Poles.  In  the  six¬ 
teenth  century  they  approached  the  Grand  Dukes  of  Mus¬ 
covy  and  solicited  their  help  against  Poland,  although  they 
looked  down  upon  the  Russians  and  considered  them 
barbarians.  Thus  the  intimate  relations  between  Russia 


414 


RUSSIA’S  POSITION  AND  FUTURE 


and  Prussia  began,  and  ever  since  the  Germans,  and  especi¬ 
ally  the  Prussians,  have  seen  in  the  Russians  savages  who 
should  be  flattered  and  be  made  useful  and  be  exploited. 

Russia  was  in  the  past  in  all  essentials  an  Asiatic  country  i 
Peter  the  Great  tried  to  Europeanise  it  and  to  provide  it 
with  a  European  army,  fleet,  diplomatic  service,  adminis¬ 
tration,  etc.  He  required  the  assistance  of  skilled  Euro¬ 
pean  experts.  Not  unnaturally,  he  turned  to  his  German 
neighbours,  and  his  successors  followed  his  example.  They 
did  so  all  the  more  readily  as,  since  the  time  of  Peter  the 
Great,  it  became  the  settled  custom  of  the  Russian  mon- 
archs  to  seek  their  consorts  in  Germany.  It  is  a  remark¬ 
able  fact  that  all  the  successors  of  Peter  the  Great,  with 
one  single  exception,  have  entered  upon  German  matri¬ 
monial  alliances,  as  the  following  table  shows : 

Alexis,  son  of  Peter  the  Great — Princess  Charlotte  of 
Brunswick. 

Empress  Anna — Duke  Charles  Frederick  of  Holstein- 
Gottorp. 

Empress  Elizabeth — not  married. 

Peter  III. — Catherine  (the  Great)  of  Anhalt-Zerbst. 

Paul — Princess  Natalie  of  Hesse-Darmstadt,  and,  in 
second  marriage,  Princess  Marie  of  Wiirtemberg. 

Alexander  I. — Princess  Elisabeth  of  Baden. 

Nicholas  I. — Princess  Alexandra,  the  daughter  of  King 
William  III.  of  Prussia. 

Alexander  II. — Princess  Marie  of  Hesse-Darmstadt. 

Alexander  III. — Princess  Dagmar  of  Denmark. 

Nicholas  II. — Princess  Alexandra  Alix  of  Hesse-Darm¬ 
stadt. 

By  the  constant  intermarriage  of  Russian  rulers  with 
German  consorts  the  Russian  blood  in  them  was  con¬ 
stantly  weakened.  The  House  of  Romanoff  was  replaced 
by  the  House  of  Holstein-Gottorp,  and  by  constant  infu¬ 
sions  of  German  blood  the  Russian  family  became  more 
and  more  German  from  generation  to  generation.  The 


RUSSIA’S  POSITION  AND  FUTURE 


415 


members  of  the  Imperial  family  and  the  aristocracy  not 
unnaturally  followed  the  example  set  to  them  from  above, 
and  the  Germanised  Court  became  surrounded  with 
German  courtiers,  German  advisers,  and  German  friends, 
and  the  children  of  the  Imperial  family  and  of  the  nobility 
were  handed  over  to  German  governesses,  German 
teachers,  and  German  companions.  The  Imperial  Court 
and  the  leading  families  of  Russia  lived  rather  in  a  German 
than  in  a  Russian  atmosphere,  even  if  they  spoke  Russian 
or  French  among  themselves. 

Since  the  time  of  Peter  the  Great  men  of  German  race 
influenced  or  directed  the  activities  of  the  country.  These 
men  came  partly  from  Germany  proper,  and  especially 
from  Prussia,  partly  from  the  Baltic  provinces  which 
Russia  had  won  by  conquests.  In  the  Baltic  provinces 
the  German  barons  owned  the  land  and  the  native  Slavs 
tilled  it  for  their  masters.  Many  of  the  Baltic  Germans 
became  faithful  Russian  subjects.  Still,  they  maintained 
their  connection  with  Germany,  spoke  German  among 
themselves,  intermarried  with  Germans  from  Germany, 
and  considered  themselves  rather  Germans  than  Russians. 

Surprisingly  large  numbers  of  the  most  eminent  Russians 
bear  German  names,  and  are  Germans  by  descent.  How¬ 
ever,  the  proportion  of  Germans  who  have  risen  to  emi¬ 
nence  in  Russia  is  probably  greater  than  would  appear  from 
a  cursory  examination  of  Russian  history.  Many  eminent 
Germans  in  Russia  have  Russianised  their  names;  others 
have  Polonised  them,  and  others,  again,  have  assumed  a 
French  appearance.  For  instance,  von  Plehve  is  generally 
known  as  de  Plehve,  von  Benckendorff  as  de  Benckendorff, 
etc.  Let  us  briefly  examine  the  influence  of  the  Germans 
in  the  direction  of  Russian  affairs  since  the  time  of  Peter 
the  Great. 

During  the  reign  of  Peter  the  Great  some  of  the  most 
eminent  men  were  Germans.  Among  his  leading  Generals 


416 


RUSSIA’S  POSITION  AND  FUTURE 


were  Field-Marshal  Baron  Ronne,  who  won  the  Battle  of 
Poltava;  Field-Marshal  Munich,  Field  Marshal  Lacy,  and 
Count  Ostermann,  the  leading  Russian  diplomat  and 
administrator  of  his  time.  During  the  reign  of  Empress 
Anna  the  Germans  ruled  Russia  under  the  direction  of  her 
favourite  Biron  (whose  real  name  was  Biiren),  his  brothers, 
the  brothers  Lowenwolde,  General  Bismarck,  Albedyll, 
and  others.  Among  the  leading  Generals  during  the  wars 
with  Napoleon  were  Field-Marshals  Barclay  de  Tolly, 
Osten-Sacken,  Wittgenstein,  and  Diebitsch,  and  Generals 
Bennigsen,  Phull,  and  Toll.  During  the  Crimean  War  we 
meet  with  many  German  Generals,  among  them  Field- 
Marshal  Berg  and  General  Todleben,  the  defender  of 
Sevastopol. 

Men  of  German  birth  and  descent  who  came  either  from 
Germany  or  from  the  Baltic  provinces  of  Russia  have  had 
a  strong  hold  upon  the  army  up  to  recent  times.  Of  the 
three  armies  of  Manchuria  during  the  Russo-Japanese 
War,  two  were  commanded  by  men  of  German  name, 
Generals  Bilderling  and  Kaulbars,  and  Port  Arthur  was 
defended  by  General  Stoessel.  Among  the  other  Generals 
bearing  German  names  who  commanded  during  that 
war  were  the  following:  Stakelberg,  Gripenberg,  Keller, 
Rennenkampf,  Gerngross,  Gruber,  Meyendorf,  Rediger, 
Gerschelmann,  Guppenberg,  Hanenfeld,  Dekinlein,  von 
den  Brinken,  Krause,  Witte,  Fleischer,  Webel,  Rebinder, 
von  Baumgarten,  Ecke,  Guenichte,  Fock.  Among  the 
most  prominent  naval  commanders  were  Admirals  Stark, 
Jesse,  Essen,  Witgeft,  and  Virenius. 

During  the  Great  War  many  of  the  German  commanders 
disappeared,  but  before  its  outbreak  German  influence  had 
been  extremely  strong  in  the  highest  positions.  Of  the 
twenty-seven  Army  Corps  in  Russia  proper,  no  less  than 
ten  were  commanded  in  1912  by  men  bearing  German 
names.  They  were  the  following : 


RUSSIA’S  POSITION  AND  FUTURE  417 


Grenadier  Corps 

General  Eck. 

2nd  Army  Corps 

•  •  5  5 

Adlerberg. 

3rd 

•  •  5  5 

Rennenkampf. 

6th 

•  •  5? 

Schwank. 

10th  ,, 

•  •  JJ 

Sievers. 

13th  ,, 

•  •  5? 

Evert. 

16th  ,, 

•  •  J5 

Geismann. 

18th 

•  •  5  5 

Krusenstern. 

23rd  ,, 

•  •  5  5 

Rausch  de  Traubenberg. 

24th 

•  •  55 

Gerngross. 

In  the  Diplomatic  Service 

men  bearing  German  names 

were  as  prominent 

as  they 

were  in  the  army.  Count 

Nesselrode  was  Minister  of  Foreign  Affairs  during  forty 
years  from  1816  to  1856.  Among  the  Cabinet  Ministers 
of  recent  times  were  von  Plehve,  Sievers,  Korff,  Reutern, 
Budberg,  Bunge,  Lamsdorff,  Witte,  Zaenger,  Schwartz, 
Bark,  Roediger,  Langhoff,  Fredericks,  Stuermer.  The 
Russian  Ambassador  in  London  was  Count  de  Bencken- 
dorff,  and  at  one  time  his  Counsellor  of  Embassy  was  von 
Gravenitz,  and  the  Russian  Consul-General  was  Baron 
Ungern-Sternberg. 

The  influence  of  men  with  German  names  at  the  Rus¬ 
sian  Court  was  very  great.  The  principal  adviser  of  the 
Czar  was  the  Minister  of  the  Imperial  Household,  Baron 
Fredericks,  and  among  the  members  of  the  Czar’s  Maison 
Militaire  were  Baron  Meyendorff,  Baron  Fredericks  I., 
Baron  Fredericks  II.,  and  Generals  Gripenberg,  Griin- 
wald,  Benckendorff,  Budberg,  Feldmann,  Roop,  Keller, 
Kaufmann,  Wolf,  Hey  den,  Mengden. 

The  Russian  Council  of  Empire,  or  Senate,  was  com¬ 
posed  of  1 96  members.  Among  these  were,  before  the  War, 
the  following  gentlemen  bearing  German  names:  Pahlen, 
Rohrberg,  Roop,  Schreiber,  Witte,  Fredericks,  Frese, 
Wahl,  Schewitch,  Sabler,  Unterberger,  Miiller-Zakomelsky 
Rodiger,  Hoyningen-Huene,  Kaufman,  Korff,  Schmeman, 


418 


RUSSIA’S  POSITION  AND  FUTURE 


Schwartz,  Schlippe,  Schafhausen-Schonberg-Eck-Schaufus 
Toll,  von  Stunner,  Budberg,  Lieven,  Deutsch. 

Men  of  German  names  were  as  prominent  in  society  and 
among  the  professional  men  as  they  were  in  the  army,  in 
the  Diplomatic  Service,  and  at  Court.  Among  the  pro¬ 
fessors  at  Petrograd  University  there  were  in  1912  Messrs. 
Braun,  Wolter,  Kahl,  Rosenfeld,  Fridolin,  Frank,  Bettak, 
von  Glasenapp,  Borgmann,  Karl  Schmidt,  Henkel,  Rich¬ 
ter,  Lewinsen- Lessing,  Gunther,  Petr  Schmidt,  Wagner, 
Schlater,  Friesendorf,  Schulz,  Busch,  Berg,  von  Weimarn, 
I.  I.  Kaufmann,  Grimm,  Gorenberg,  Hessen,  Heine,  Ku- 
lischer,  Schvittau,  von  Reusner,  Kaufmann,  Mandelstam, 
Bartold,  Salemann,  Alexander  Schmidt,  von  Holstein. 

It  is  often  asserted  that  2,000,000  Germans  live  in 
Russia.  The  majority  of  these  are  tradesmen,  agricul¬ 
turists,  artisans,  etc.  However,  their  influence  was  small 
compared  with  the  few  thousands  who  occupied  some  of 
the  most  eminent  positions  in  the  State.  In  1843  there 
was  published  in  London  a  book,  Russia  and  the  Russians 
in  1 842,  by  J.  G.  Kohl.  It  was  translated  from  the 
German.  We  read  in  it  • 

(Setting  aside  the  influence  established  in  Russia  in  very 
early  ages  by  the  Varagian- Germanic  races,  and  subse¬ 
quently  by  the  Hanseatic  merchants,  the  importance  en¬ 
joyed  by  the  Germans  may  be  dated  from  the  reign  of  Ivan 
Wassiliewitsch,  who  not  only  transported  many  German 
prisoners  of  war  from  Livonia  into  the  interior  of  Russia, 
but  likewise  favoured  emigration  from  Germany.  ...  At 
length  the  empire  included  within  its  confines  whole  prov¬ 
inces  inhabited  by  Germans.  Tracts  of  waste  land  were 
peopled  with  German  colonists ;  and  men  of  learning,  states¬ 
men,  and  military  commanders  were  invited  to  emigrate 
from  Germanv  to  Russia.  .  .  . 

The  development  of  Russia  as  a  European  Power,  as 
exemplified  in  her  rapid  advancement  since  the  time  of 
Peter  the  Great,  is  mainly  attributable  to  Germany,  and 
has  been  worked  out  under  German  auspices.  The  organi- 


RUSSIA’S  POSITION  AND  FUTURE 


419 


sation  of  the  Russian  Army,  the  improvement  of  the  laws, 
the  custom-house  and  tax  regulations,  the  ranking  of  the 
classes  of  nobility,  even  the  rules  of  Court  etiquette,  all 
have  been  transferred  from  Germany,  or  partially  imitated 
from  German  models.  .  .  .  By  the  Petersburg  Court 
Calendar  for  the  year  1837  it  appears  that  of  600  of  the 
highest  posts  in  the  empire,  from  Ministers  and  Field- 
Marshals  downward,  no  fewer  than  130  were  filled  by 
German  names.  .  .  .  In  the  same  year  it  appears  that  ten 
Germans  had  seats  in  the  Senate,  and  that  of  300  ladies 
who  held  Court  appointments  as  ladies  of  honour,  maids 
of  honour,  etc.,  40  had  German  family  names.  ...  In 
no  branch  of  the  public  service  of  Russia  is  German  talent 
more  conspicuous  than  in  the  army,  and  fully  one-half  of 
the  most  distinguished  Russian  Generals  are  Germans.  .  .  . 

Of  all  branches  of  intellectual  acquirement,  science  is 
that  which  the  Germans  have  made  most  peculiarly  their 
own.  Thus  it  naturally  follows  that  in  Russia,  where 
German  merit  of  all  kinds  is  readily  acknowledged,  German 
science  should  be  held  in  special  estimation.  The  pro¬ 
found  respect  entertained  by  the  Russians  for  German 
knowledge  prompts  them  to  yield  the  palm  to  Germans 
without  dispute.  .  .  .  Whenever  a  German  appears, 
they  respectfully  bow,  and  lay  aside  all  pretension. 

The  learned  institutions  of  Russia  which  enjoy  the 
highest  degree  of  estimation,  both  at  home  and  abroad, 
are  the  University  of  Dorpat  and  the  Academy  of  Peters¬ 
burg.  Both  are  founded  on  German  plans  and  headed  by 
Germans.  In  the  University  of  Dorpat,  all  the  profes¬ 
sors,  with  one  single  exception,  are  Germans ;  and  in  the 
Academy  the  most  eminent  names  belong  to  the  same 
nation.  In  the  other  five  Russian  Universities  we  also 
find  at  least  some  German  professors,  and  in  all  their  most 
important  proceedings  German  names  are  distinguished. 

The  German  thinks  himself  metal  of  a  superior  stamp 
to  the  Russian,  and  the  latter  by  every  sort  of  acknowledg¬ 
ment  confirms  him  in  that  belief.  The  educated  daughter 
of  a  German  artisan,  in  the  interior  of  Russia,  raises  her 
eyes  to  orders  and  epaulets  which  in  Germany  would  be 
stars  far  beyond  the  reach  of  her  attainment.  Nothing  is 
more  common  than  marriages  between  the  families  of  poor 
Germans  and  rich  Russians;  thus  we  find  many  a  Herr 


420  RUSSIA’S  POSITION  AND  FUTURE 


Meyer  or  a  Herr  Muller  whose  wife  was  born  Princess  G. 
or  Princess  K. ;  and  many  a  Princess  X.  or  Z.  who  owes 
her  rank  to  her  German  father’s  needle.  ...  In  general, 
a  Russian  will  trust  a  German  in  preference  to  his  brother ; 
and  should  a  Russian  have  any  object  of  importance  or 
value  which  he  wishes  to  deposit  in  safe  custody,  or  should 
he  require  the  advice  of  a  sincere  friend,  he  will  assuredly 
apply  to  a  German  rather  than  to  one  of  his  own  country¬ 
men.  .  .  . 

Though  the  whole  of  the  vast  Russian  Empire,  even  to 
its  remotest  confines,  is  strongly  impregnated  with  German 
elements,  yet  none  of  its  cities  is  Germanised  to  such  a 
degree  as  the  capital  itself.  Even  the  German  name  of 
that  capital  seems  to  indicate  the  nation  whose  people  will 
find  themselves  most  at  home  there.  But  the  Germans 
havenot  christened  Petersburg  only ;  they  have  been,  more¬ 
over,  godfathers  to  most  of  the  new  colonies  in  its  neigh¬ 
bourhood — viz.,  Cronstadt,Peterhof,Oranienbaum,  Schlus¬ 
selburg,  Katharinenhof,  Kronschlott,  Riesbank,  Inster- 
burg,  etc.  These  facts  alone  satisfactorily  explain  the 
influence  of  the  Germans  in  Petersburg,  an  influence  the 
extent  of  which  must  be  obvious  when  it  is  recollected  that 
the  number  of  Germans  in  that  capital  alone  amounts  to 
40,000.  All  these  Germans  may  be  said  to  belong  to  the 
cultivated  classes  of  society,  and  as  military  officers,  civil 
functionaries,  merchants,  manufacturers,  artists,  etc., 
they  rank  on  a  footing  of  equality,  and  often  of  superiority, 
to  the  Russians  in  the  circles  in  which  they  respectively 
move.  .  .  .  Petersburg  may  be  ranked  among  the 
German  cities  of  the  Baltic.  .  .  . 

The  physicians  and  apothecaries  of  Petersburg  are  all, 
without  exception,  Germans.  According  to  Reimer’s 
Directory  there  are  among  the  surgeons  of  Petersburg  no 
fewer  than  40  Russians,  and  only  30  Germans  and  other 
foreigners;  whilst  of  the  120  physicians  there  were  only 
about  a  dozen  Russians.  .  .  .  Petersburg  contains  a 
number  of  Germans  who  are  in  the  service  of  the  State 
and  in  various  branches  of  the  Service:  in  military  and 
civil  employments,  in  the  navy  and  in  the  army,  and  in 
the  administrative  and  legislative  departments.  The 
offices  of  Police-Director  and  Governor-General  of  Peters¬ 
burg  have  usually  been  held  by  Germans, 


RUSSIA’S  POSITION  AND  FUTURE  421 


Up  to  the  War  the  position  of  the  Germans  in  Russia  was 
very  much  as  it  was  at  the  time  described  by  Mr.  Kohl. 
However,  in  one  respect  a  new  development  had  taken 
place.  Until  quite  recently  Russia’s  foreign  trade  was 
very  small,  and,  as  railways  were  lacking,  the  foreign 
trade  of  the  country  was  carried  on  chiefly  by  sea  from  the 
harbours  in  the  Baltic  and  in  the  Black  Sea.  As  long  as 
Russia’s  foreign  trade  was  carried  chiefly  by  ships,  Great 
Britain  was  Russia’s  most  important  purveyor  of  imports 
and  the  principal  purchaser  of  her  exports.  The  advent 
of  the  railway  and  German  pushfulness  changed  the  course 
of  Russia’s  trade.  Owing  to  her  proximity,  the  develop¬ 
ment  of  the  Russian  railways,  and  the  strong  hold  which 
Germans  had  upon  affairs  in  Russia,  German  business  men 
began  to  monopolise  the  direction  of  Russian  economic 
development.  The  German  banks,  German  manufacturers, 
and  German  merchants,  began  to  exploit  the  resources  of 
the  country.  The  Germans  became  at  least  as  prominent 
in  the  direction  ot  Russian  economic  affairs  as  in  the  direc¬ 
tion  of  Russian  military  affairs  and  of  Russian  policy. 
The  rapid  progress  of  the  German  business  at  the  cost  of 
Great  Britain  can  perhaps  best  be  visualised  by  the  figures 
of  Russia’s  foreign  trade,  which  show  the  following  amaz¬ 
ing  changes : 


Imports  into  Russia. 


¥  ear. 

From  Germany. 

From  the  United 
Kingdom. 

Total  Imports. 

Roubles. 

Roubles. 

Roubles. 

1870  . . 

136,423,000 

106,880,000 

309,100,000 

1880  . . 

274,268,000 

150,485,000 

622,800,000 

1890  . . 

114,635,000 

93,400,000 

416,065,000 

1900  .. 

216,853,000 

127,144,000 

626,375,000 

1905  . . 

240,411,000 

97,410,000 

635,087.000 

1910  . . 

449,794,000 

153.847,000 

1,084,446,000 

1913  .. 

642,756,000 

170,352,000 

• 

1,220.474,000 

28 


422  RUSSIA’S  POSITION  AND  FUTURE 

Only  a  very  short  time  ago  Great  Britain  held  the  fore¬ 
most  place  as  an  importer  of  goods  into  Russia,  a  large 
part  of  which  went  via  Germany.  Her  position  has 
rapidly  been  taken  by  Germany.  In  1913  Germany  sup¬ 
plied  Russia  with  more  than  one-half  of  her  foreign 
imports,  and  these  consisted  chiefly  of  manufactures  re¬ 
quired  for  the  development  of  the  country.  The  goods 
sent  from  Germany  into  Russia  consisted  of  iron  and  steel, 
implements,  machinery,  tools,  nails,  constructional 
material,  hardware,  chemicals  and  pharmaceutical  goods, 
and  other  manufactures,  while  England’s  exports  to 
Russia  consisted  very  largely  of  coal.  During  the  last  few 
decades  Russia  had  become  as  dependent  upon  Germans 
for  the  direction  and  development  of  her  economic  life  as 
for  the  conduct  of  her  policy  and  the  direction  of  military 
affairs.  The  Germans  had  obtained  so  strong  a  hold  upon 
the  Russian  Army  and  Administration,  upon  the  Russian 
Universities  and  Russian  business,  that  the  Russians  found 
it  exceedingly  difficult  to  dispense  with  German  assistance. 
Baron  Heyking  wrote  in  his  book  Problems  Confronting 
Russia  : 

During  the  Great  War  the  persecution  of  the  Baltic 
stock  of  Teutonic  descent  was  going  on  in  face  of  the  fact 
that  none  of  them  refused  to  fight  for  Russia,  that  many 
won  high  distinctions  for  valour  on  the  battlefield  or  died 
for  their  country,  and  that  whenever  they  had  a  chance  to 
do  so  they  served  their  country  with  all  their  power  and 
energy.  W  hatever  may  have  been  their  worth  in  the 
past,  they  have  always  upheld  order,  law,  and  organisa¬ 
tion,  and  in  this  respect  their  services  were  invaluable  to 
Russia.  But  as  soon  as  war  broke  out  a  veritable  cam¬ 
paign  was  started  for  depriving  them  of  office,  and  men 
were  thrown  out  of  employment  who  were  the  mainstay 
of  tfie  administration  and  industrial  life  of  the  country, 
foi  no  other  reason  than  that  they  were  of  Baltic  origin.  .  .  . 
ihe  systematic  discarding  of  Generals  bearing  German 
names  during  the  war  was  a  grave  mistake,  for  these  men 


RUSSIA’S  POSITION  AND  FUTURE 


423 


were  a  most  reliable,  loyal,  and  efficient  element  in  the 
Russian  Army.  In  discarding  men  of  their  own  nation¬ 
ality,  but  of  Teutonic  origin,  holding  positions  in  the  army, 
civil  administration,  and  industrial  establishments,  Russia 
did  herself  indeed  a  terrible  wrong.  These  men  simply 
could  not  be  replaced.  Their  absence  was  one  of  the 
reasons  of  the  quick  degeneracy  of  the  Revolution  into 
rapine  and  anarchy. 

In  the  past  the  Germans  and  the  Russians  have  co¬ 
operated  for  their  joint  advantage.  The  two  nations  have 
been  drawn  towards  one  another  by  three  motives :  by  their 
mutual  hostility  to  the  Poles ;  by  the  desire  of  the  Germans 
to  exploit  the  Russian  State  and  the  Russian  people;  and 
by  the  desire  of  the  Russians  to  make  use  of  the  abilities  of 
the  Germans.  The  currents  of  history  are  not  easily  re¬ 
versed.  Century-old  tendencies  of  co-operation  among 
neighbour  nations  are  not  easily  destroyed.  It  seems 
highly  probable  that  Russia  and  Germany  will  try  once 
more  to  dominate  and  to  exploit  Poland  and  perhaps  to 
divide  the  country  between  themselves,  and  that  the 
Germans  will  strive  again  to  make  use  of  the  good-nature, 
docility,  and  submissiveness  of  the  Russian  people  and  of 
the  wealth  of  their  huge  country. 

The  creation  of  a  powerful  and  independent  Poland,  of 
a  great  democratic  and  Roman  Catholic  State  which 
separates  the  two  non-Catholic  States,  will  set  up  a  strong 
physical  barrier  between  Germany  and  Russia.  However, 
the  existence  of  a  powerful  Poland  need  not  prevent  the 
Germans  penetrating  and  permeating  Russia  and  obtain¬ 
ing  once  more  the  direction  and  control  of  the  govern¬ 
ment  of  the  country,  of  its  army,  of  its  Administration,  of 
its  intellectual  life,  and  of  all  its  economic  factors.  The 
Bolsheviks  have  almost  exterminated  the  intellectual 
leaders  of  the  Russian  nation.  A  regenerated  Russia  will 
find  itself  almost  a  leaderless  mob.  The  new  Russia  will 
therefore  more  than  ever  be  dependent  upon  the  guidance 


424  RUSSIA’S  POSITION  AND  FUTURE 


of  able  foreigners.  The  situation  of  the  new  Russia  will 
resemble  that  of  Russia  under  Peter  the  Great,  when  it 
emerged  from  barbarism. 

Germany  has  mercilessly  exploited  Russia,  and  has  then 
ruined  it.  Although  the  Russians  may  hate  Germany  and 
may  not  wish  to  fall  once  more  under  German  influence, 
circumstances  may  prove  too  strong  for  them,  and  may 
favour  the  return  of  the  Germans  to  power  in  that  great 
country.  Germany  lies  nearest  at  hand.  Many  Germans 
in  Germany  speak  Russian,  and  are  intimately  acquainted 
with  Russian  society,  with  Russian  predilections  and  pre¬ 
judices,  and  with  Russian  affairs.  Very  few  Americans, 
Englishmen,  and  Frenchmen,  know  the  Russian  language, 
and  still  fewer  are  in  touch  with  the  Russian  people.  The 
numerous  German  emigrants  who  have  lived  in  Russia 
for  decades  and  the  Germans  of  the  Baltic  provinces  will 
be  so  many  agents  and  interpreters  acting  in  Germany’s 
interest.  They  may  once  more  supply  the  connecting- 
link  between  the  two  countries.  A  starving  man  will  take 
bread  even  from  his  worst  enemy.  If  Englishmen,  Ameri¬ 
cans,  and  Frenchmen,  concentrate  all  their  energies  upon 
developing  their  own  territory  and  exploiting  their  re¬ 
sources,  and  upon  capturing  the  trade  of  the  world,  Russia 
would  be  forced  against  her  will  to  apply  to  Germany  for 
the  material  assistance  and  for  the  skilled  leaders  she 
requires.  Thus  Russia  may  gradually,  and  almost 
imperceptibly,  become  once  more  a  German  preserve,  a 
sphere  of  German  influence,  and  a  German  protectorate. 

The  latent  resources  and  possibilities  of  Russia  are  prac¬ 
tically  unlimited.  It  is  in  the  highest  interest  of  Europe 
and  of  the  world  that  Russia  be  wealthy,  cultured,  inde¬ 
pendent,  happy,  and  strong;  that  Russia’s  power  and 
Russia’s  legions  should  not  fall  again  under  the  influence 
of  a  foreign  Power,  and  be  hurled  by  that  Power  against 
the  peaceful  nations  of  the  world.  Therefore,  the  Govern- 


RUSSIA’S  POSITION  AND  FUTURE  425 


ments  of  the  victorious  democracies  should  devote  their 
intelligence  and  energy  not  only  to  the  setting  up  of  a 
chain  of  independent  States  physically  separating  Russia 
from  Germany,  but  should  by  all  means  in  their  power 
promote  the  economic,  intellectual,  and  administrative 
regeneration  of  that  country,  the  fate  of  which  may  con¬ 
ceivably  determine  the  fate  of  the  world. 


CHAPTER  XVII 

THE  ECONOMIC  POSITION  AND  FUTURE  OF  JAPAN 

The  development  of  the  commerce,  trade,  navigation, 
and  industry  of  a  nation  depends  mainly  on  two  factors : 
on  the  natural  circumstances  of  the  country, _  and  on 
the  abilities,  traditions,  and  ambitions  of  the  people  in¬ 
habiting  it. 

Japan  consists  of  a  number  of  islands  which  have  much 
length  but  little  width,  and  the  country  is  exceedingly 
mountainous.  The  consequence  is  a  twofold  one:  the 
people  have  to  work  exceedingly  hard  and  to  live  with 
extreme  frugality  in  order  to  make  a  living,  and  they  are 
forced  to  rely  very  largely  on  the  sea  for  communication 
between  the  different  parts  of  the  Empire  and  for  earning 
their  daily  bread. 

As  lofty  and  rugged  mountains  prevail  throughout  the 
Empire,  only  a  small  proportion  of  land  is  suitable  for 
tillage.  The  Japanese  live  chiefly  on  rice,  which  yields 
very  large  harvests,  but  then  the  rice  crop  is  notoriously 
unreliable.  F amines  are  frequent  in  those  countries  wThere 
rice  is  the  staple  food.  Besides,  the  absence  of  plains  is 
very  unfavourable  to  the  production  of  meat.  Conse¬ 
quently  the  whole  of  Japan  possesses  only  1,342,990 
cattle,  or  about  one-tenth  as  many  as  the  United  King¬ 
dom.  The  number  of  sheep,  goats,  and  pigs,  kept  is  quite 
insignificant. 

The  Japanese  Empire  is  exceedingly  densely  inhabited. 
In  1917  the  population  was  as  follows : 

426 


JAPAN’S  POSITION  AND  FUTURE 


427 


In  Japan  proper 
In  Korea 
In  Formosa 
In  Sagh alien 


56,550,348 

16,998,191 

3,650,047 


68,207 


Total  . .  77,266,793 


The  population  of  Japan  and  of  its  recently  acquired 
territories  increases  with  extraordinary  rapidity.  The 
inhabitants  of  Japan  proper  increased  from  49,588,804  in 
1908  to  56,550,348  in  1917.  If  we  allow  for  the  scarcity 
of  agricultural  land,  Japan  is  by  far  the  most  densely 
populated  country  in  the  world,  and  as  the  people  are 
multiplying  with  extraordinary  rapidity,  it  is  perfectly 
obvious  that  the  pressure  upon  the  scanty  national  re¬ 
sources  is  becoming  rapidly  greater ;  that  from  year  to  year 
the  difficulty  of  the  people  to  make  a  living  is  growing; 
that  they  are  forced,  quite  as  much  as  the  people  of  the 
United  Kingdom,  to  rely  for  their  existence  on  the  manu¬ 
facturing  industries,  on  foreign  commerce,  on  trade  and 
navigation,  and  on  the  fishing  industry. 

The  Japanese  have  been  a  commercial,  an  industrial, 
and  a  seafaring  nation  since  the  earliest  time.  Naturally, 
they  are  at  least  as  fit  for  industrial  and  commercial  success 
as  are  the  English  people  and  Americans.  In  addition  to 
these  qualities  they  have  a  quality  which  is  bound  to  favour 
their  industrial  and  commercial  expansion  very  greatly. 
While  the  men  of  the  West  strive  for  economic  success 
mainly  in  order  to  improve  their  position,  the  motive  of 
gain  is  reinforced  in  the  case  of  the  Japanese  by  their 
patriotism.  The  Japanese  merchant,  manufacturer,  ship¬ 
owner,  clerk,  artisan,  or  sailor,  works  with  the  greatest 
conscientiousness  and  ambition,  not  only  in  order  to 
benefit  himself,  but  also  in  order  to  benefit  his  country. 
Hence  Japanese  business  men  and  Japanese  workers  will 
readily  undertake  unprofitable  or  hazardous  work  in  the 
belief  that  the  country  is  benefited  thereby.  That  motive 


428 


JAPAN  S  POSITION  AND  FUTURE 


is  totally  missing  among  the  more  individualistic  peoples 
of  the  West. 

As  the  Japanese  are  compelled  to  live  very  largely  on 
food  imported  from  abroad,  they  must  pay  for  their  food 
imports  and  for  the  imported  raw  material  which  they  lack 
by  means  of  exports.  With  the  object  of  paying  for  these 
indispensable  foreign  imports,  the  Japanese  have  striven 
to  develop  their  export  trade  with  the  greatest  energy. 
Among  their  agricultural  exports,  that  of  silk  and  silk 
tissues  is  particularly  important.  The  rapidity  with  which 
silk- production  has  increased  in  Japan  may  be  seen  from 
the  fact  that  it  expanded  from  3,512,965  kwan  (a  kwan  is 
equivalent  to  8  J  pounds)  in  1 90 8  to  7, 52 8, 1 76  kwan  in  1 91 7. 
In  the  short  space  of  a  decade  Japanese  silk-production 
more  than  doubled.  The  production  of  tea  increased  dur¬ 
ing  the  same  period  by  50  per  cent.,  and  that  of  most 
agricultural  staples  expanded  likewise  very  considerably. 

Modern  industrial  success  is  based  upon  the  employment 
of  machinery,  and  it  is  largely  dependent  upon  an  abundant 
supply  of  coal  and  iron.  Unfortunate^,  Japan  is  exceed¬ 
ingly  poor  in  both  these  materials.  Her  store  of  coal  is 
very  small.  It  comes  only  to  about  8,000,000,000  tons, 
while  that  of  the  United  Kingdom  is  about  1 90,000,000,000 
tons.  The  iron  ore  possessed  by  Japan  is  supposed  to 
contain  28,000,000  tons  of  metallic  iron,  while  the  iron  ore 
of  the  United  Kingdom  contains  no  less  than  455,000,000 
tons  of  iron  in  sight,  with  reserves  which  are  believed  to  be 
at  least  twenty  times  as  large.  The  iron  ore  reserves  of 
Japan  are  supposed  to  be  exceedingly  small. 

An  energetic  nation  can  frequently  replace  by  some 
means  or  other  the  materials  it  requires,  but  does  not  pos¬ 
sess.  Coal  as  a  means  of  power  for  industrial  purposes  can 
largely  be  replaced  by  electrical  energy  derived  from  water¬ 
falls.  Japan  is  rich  in  waterfalls  which  may  be  harnessed. 
Besides,  China  abounds  in  both  coal  and  iron  ore.  Hence 


JAPAN’S  POSITION  AND  FUTURE 


429 


Japan  may  derive  the  coal  and  iron  she  lacks  from  the 
inexhaustible  store  of  her  continental  neighbour. 

Japan  has  developed  her  natural  resources  with  the 
greatest  energy.  According  to  the  Eighteenth  Financial 
and  Economic  Annual  of  Japan,  an  official  publication 
similar  to  the  Statistical  Year-Book  of  the  United  King¬ 
dom,  Japan’s  production  of  coal,  copper,  lead,  pig-iron, 
and  steel,  has  increased  as  follows  during  the  last  decade : 


Year. 

Coal. 

Copper. 

Lead. 

Tig-Iron. 

Steel. 

1908 

1913 

1917 

Tons. 

14,825,363 

21,315,962 

26,361,420 

Kin 

(1  %  pounds). 
67,754,886 
110,835,408 
180,063,749 

Kin. 

4.850,501 

6,294,854 

26,345,308 

Kwan. 
(8^  pounds). 
11,201,874 
15,108,682 
32,741,848 

Kwan. 

695,826 

3,660,664 

98,672,466 

These  figures  show  an  extraordinary  progress.  During 
the  last  decade  the  production  of  coal  has  nearly  doubled, 
that  of  copper  has  nearly  trebled,  that  of  lead  has  grown 
more  than  fivefold,  and  that  of  steel  considerably  more 
than  a  hundredfold.  The  production  of  copper,  which  is 
extremely  important  in  shipbuilding  and  in  the  manu¬ 
facture  of  electrical  apparatus,  was  valued  in  1917  at 
£12,000,000,  that  of  lead  at  £5,500,000,  and  that  of  steel 
at  £8,250,000.  Of  course,  war  prices  have  swelled  these 
figures  to  some  extent. 

The  table  given  furnishes  figures  of  production  for  1908, 
1913,  and  1917.  Therefore,  it  gives  a  picture  of  produc¬ 
tion  during  the  five  years  preceding  the  War  and  during 
the  War  period.  It  will  be  noticed  that  the  production  of 
coal,  copper,  lead,  pig-iron,  and  steel,  has  increased  very 
rapidly  during  the  five  years  preceding  the  Great  War,  and 
that  the  War  itself  has  proved  for  the  Japanese  industries 
a  most  powerful  stimulus.  Between  1913  and  1917  the 


430 


JAPAN’S  POSITION  AND  FUTURE 


production  of  lead  increased  fivefold  and  that  of  steel 
twenty- five-fold. 

The  Japanese  manufacturing  industries  have  expanded 
as  mightily  as  have  the  Japanese  mining  industries.  The 
progress  of  the  Japanese  manufacturing  industries  may 
most  briefly  and  most  impressively  be  summarised  as 
follows : 


Y  ear. 

Coal  Consumed 
in  Factories. 

Operatives 

Employed. 

Electrical 

Horse-Powers 

Used. 

1907  .. 

Tons. 

4,420,545 

643,292 

32,703 

1913  .. 

7,613,893 

916,252 

283,563 

1916  .. 

10,426,076 

1,095.301 

293,386 

During  the  last  decade  coal  consumption  in  the  Japanese 
factories  has  increased  two-and-a-half-fold,  the  number  of 
operatives  employed  has  increased  by  about  60  per  cent., 
and  the  number  of  electrical  horse-powers  used  has 
increased  no  less  than  ninefold.  Not  so  long  ago  Japan 
was  known  as  a  country  the  industrial  exports  of  which 
consisted  chiefly  of  drawing-room  knick-knacks,  cheap 
matting,  etc.,  which  were  the  produce  of  handicraft.  Of 
recent  years,  and  especially  during  the  last  decade,  Japan 
has  become  a  manufacturer  of  Western  productions  on  a 
very  considerable  scale,  and  her  methods  of  production 
have  become  exceedingly  efficient.  The  most  complicated 
industrial  production  is  supposed  to  be  the  warship  and  the 
liner.  Not  so  very  long  ago  Japan  imported  even  her 
small  boats  from  abroad.  Recently  she  has  launched 
gigantic  Super-Dreadnoughts  and  rapid  passenger  vessels 
which  have  won  the  unstinted  admiration  of  the  highest 
English  and  American  experts.  How  Japanese  ship¬ 
building  is  developing  and  how  Japanese-built  ships  are 


JAPAN’S  POSITION  AND  FUTURE 


431 


rapidly  replacing  Western-built  vessels  may  be  seen  from 
the  following  official  figures : 


Steel  and  Iron  Built  Vessels. 


Year. 

Built  in  J  apan. 

Built  Abroad. 

1907  ..  *  .. 

173 

234 

1909  . 

225 

248 

1911  . 

322 

309 

1913  . 

445 

322 

1916  . 

519 

339 

The  manufacturing  industries  are  based  upon  the  use  of 
raw  materials.  While  certain  raw  materials,  such  as  coal 
and  iron,  are  scarce  and  comparatively  dear  in  J apan,  the 
most  important  raw  material  of  all,  human  labour,  is  ex¬ 
ceedingly  cheap,  plentiful,  and  efficient,  and  its  possession 
makes  up,  and  more  than  makes  up,  for  the  deficiencies 
mentioned.  The  Financial  and  Economic  Annual  of 
Japan  enables  us  to  obtain  the  following  picture  of  Japan¬ 
ese  labour  conditions : 


Average  Daily  Wages  (Yen). 


1907. 

1909. 

1911. 

1 

1 

1913. 

1916. 

Bricklayer 

Tile -roofer 

0-96 

1-01 

1 

1-06 

1-09 

1-07 

0-87 

0  94 

1-00 

1*05 

1*02 

Stone-cutter 

0-87 

0-93 

0-94 

1-01 

1-00 

Shipwright 

0-81 

0*81 

0-86 

0-93 

0-96 

Plasterer 

0-76 

0-82 

0-86 

0-93 

0-80 

Tailor  (European 
dress 

0*75 

0-79 

0-85 

0-88 

0-87 

Carpenter 

0*75 

0-80 

0-83 

0-88 

0*85 

Sawyer 

0-73 

0-78 

0-78 

0-85 

0-84 

Paper-hanger  .  . 

0'66 

0*73 

0-75 

0-79 

0-80 

Cabinet-maker 

0-68 

0-75 

0-79 

0-84 

0-80 

Weaver  (male) . . 

0-42 

0-44 

0-43 

0-45 

0*49 

,,  (female) 

0-24 

0-26 

0-25 

0-28 

0-32 

Dyer 

0-42 

0-46 

0-54 

0-50 

1 

0-53 

432 


JAPAN  S  POSITION  AND  FUTURE 


The  Japanese  yen  is  equivalent  to  2s.  Ojd.  Generally, 
the  yen  is  for  convenience’  sake  treated  as  being  equivalent 
to  2s.  The  wages  given  above  the  line  are  the  highest 
_  wages  paid  in  Japan,  according  to  the  official  annual.  It 
will  be  noticed  that  in  1916  only  in  three  trades  the  wages 
slightly  exceeded  2s.  per  day.  These  favoured  trades 
were  the  trades  of  the  bricklayer,  of  the  tile-roofer,  and  of 
the  stone-cutter,  where  great  strength  and  skill  is  required. 
Even  the  skilled  tailor  who  makes  European  clothes  earns 
considerably  less  than  2s.  per  day. 

By  far  the  most  important  manufacturing  industry  of 
Japan  is  the  textile  industry.  It  will  be  noticed  from  the 
figures  given  below  the  line  at  the  bottom  of  the  table  that 
in  1916  the  male  weaver  earned  a  trifle  less  than  Is.  per 
day,  and  the  female  weaver  a  trifle  less  than  8d.  per  day. 
We  may  say  that  the  male  workers  of  Japan  earn  on  an 
average  from  Is.  to  2s.  per  day,  and  the  female  workers 
from  8d.  to  lOd.  per  day.  Of  course,  the  eight  hours’  day 
or  the  seven  hours’  day  or  the  six  hours’  day  is  unknown 
in  Japan.  Working  hours  seem  to  be  as  a  rule  from  ten 
to  twelve  per  day.  It  stands  to  reason  that  efficient 
workers  who  employ  the  most  modern  and  most  powerful 
machinery  and  who  earn  a  wage  of  Is.  or  so  per  day  will 
prove  exceedingly  successful  competitors  to  the  highly 
paid  workers  of  the  Western  countries. 

Wages  have  gradually  been  rising  in  Japan.  It  will  be 
seen  from  the  table  that  during  the  decade  under  con¬ 
sideration  wages,  roughly  speaking,  have  risen  about  10  or 
1 5  per  cent,  between  1907  and  1 91 6.  However,  during  the 
same  period  Western  wages  have  risen  far  more  quickly. 
The  suggestion  has  been  made  by  well-meaning  idealists 
and  by  various  labour  leaders  that  wages  should  be  made 
uniform  throughout  the  world  by  means  of  international 
agreement.  The  mere  consideration  of  the  wages  custom¬ 
arily  paid  in  Japan  shows  the  impossibility  of  carrying  out 


JAPAN’S  POSITION  AND  FUTURE 


433 


that  proposal.  The  wages  paid  in  the  well-remunerated 
Western  industries  would  be  equivalent  to  a  Cabinet 
Minister’s  salary  in  J apan.  After  all,  wages  stand  in  some 
proportion  with  the  living  conditions  of  the  people.  A 
Japanese  worker  who  can  provide  for  a  few  pence  a  day 
the  house-room,  the  food,  and  the  clothes  to  which  he  is 
accustomed,  would  scarcely  know  what  to  do  with  a 
European  wage  in  Japan,  exactly  as  a  Japanese  worker 
could  not  exist  in  an  English  or  American  town  on  half  a 
yen  a  day. 

The  working  conditions  in  the  Japanese  factories  in 
general  may  be  gauged  from  the  following  figures,  which 
also  are  taken  from  the  official  annual,  and  which  refer  to 
the  exceedingly  important  cotton  industry : 


Japanese  Cotton  Industry. 


Y  ear. 

IF  orking 
Days 
per  Year. 

Working 
Hours 
per  Day. 

Average 

Wage 

(Male). 

Average 

Wage 

(Female). 

Yen. 

Yen. 

1907  .. 

330 

21 

0-41 

0-25 

1913  .. 

320 

19 

0-45 

0-29 

1916  .. 

319 

20 

0-50 

0-32 

In  the  cotton  industry  two  shifts  of  ten  hours  each 
are  apparently  worked.  Thus,  the  maximum  result  is 
obtained  from  the  machinery,  which  is  allowed  to  rest  only 
during  a  minimum  of  time,  when  overhauling,  etc.,  is 
necessary. 

J  apan,  as  has  previously  been  stated,  is  vitally  interested 
in  developing  her  export  trade  in  order  to  be  able  to 
import  the  food  she  requires  and  the  foreign  raw  materials 
which  she  needs.  Her  exports  have  during  recent  years 
expanded  in  the  following  remarkable  manner: 


434  JAPAN’S  POSITION  AND  FUTURE 


Japanese 

Year. 

1904  . 

1909  . 

1913  . 

1914  . 

1915  . 

1916  . 

1917  . 

1918  . 


Exports. 

Yen. 

319,260,896 
613,112,511 
632,460,213 
591,101,461 
708,306,997 
..  1,127,468,118 

.  .  1,603,005,048 

.  .  1,962,700,258 


Between  1904  and  1913  Japan’s  exports  have  doubled. 
Since  1913  they  have  trebled  in  consequence  of  the  War. 
If  we  take  the  yen  at  2s.,  Japan’s  exports  have  increased 
from  £32,000,000  in  1904  to  £196,000,000  in  1918.  That  is 
a  marvellous  record,  a  record  which  is  probably  un¬ 
paralleled  in  economic  history.  Of  course,  Japan’s  export 
figures  have  been  swelled  to  some  extent  by  abnormally 
high  prices.  However,  it  cannot  be  doubted  that  Japan 
has  secured  an  extraordinary  progress  as  an  exporter  in 
the  markets  of  the  world. 

Japan,  like  many  exporting  countries,  such  as  Germany 
and  the  United  States,  has  planfully  endeavoured  to  de¬ 
velop  her  export  trade  towards  the  nations  in  the  vicinity 
of  the  homeland.  The  bulk  of  Japanese  exports  are  sent 
to  Asia,  and  particularly  to  China.  The  Japanese  have 
for  many  years  demanded,  and  fought  for,  the  open  door 
in  China,  considering  that  China  was  the  most  natural 
outlet  for  the  Japanese  manufactures,  and  believing  that 
they  need  not  fear  Western  competition  in  that  quarter. 
Some  idea  of  the  development  of  Japanese  exports  in  the 
East  may  be  obtained  from  the  table  on  following  page. 

The  development  of  Japan’s  export  trade  in  the  Far 
East  has  been  amazing.  During  the  decade  of  1904-1913 
her  exports  to  China  have  trebled,  and  so  have  her  exports 
to  British  India.  Between  1904  and  1917  Japan’s  exports 
to  China  have  grown  sixfold,  and  those  to  India  more  than 
tenfold.  During  the  War  Japan  has  neglected  to  some 


JAPAN’S  POSITION  AND  FUTURE 


435 


extent  the  Far  Eastern  market  for  the  European  and 
American  markets,  which  were  exceedingly  profitable, 
owing  to  the  heavy  demands  made  on  the  neutral 
industries.  The  vast  development  which  the  Japanese 
industries  have  secured  during  the  struggle  will  before 
long,  no  doubt,  affect  the  commercial  position  in  the  Far 
East,  for  Japan  may  be  expected  to  concentrate  her 
energies  once  more  upon  the  gigantic  markets  of  Asia. 


Japanese  Exports  (Yen). 


1904. 

1909. 

1913. 

1917. 

To  China 

To  Hong- Kong 
To  J3iitish  India 

67.985,873 

28,160,103 

9,404,954 

89,284,821 

21,675,636 

14,425,973 

184,496,773 

33,621,978 

29,873,414 

384,105,368 

57,241,924 

101,298,440 

Great  Britain  is  strongly,  one  might  perhaps  even  say 
vitally,  interested  in  the  Asiatic  markets,  and  especially 
in  the  Indian  market,  which  is  by  far  the  most  important 
market  of  Lancashire.  India  takes  the  bulk  of  British 
cottons.  Now,  it  must  be  remembered  that  the  cotton 
industry  has  become  the  most  important  industry  of  Japan. 
Japan  has  become  another  England  in  the  Far  East,  pos¬ 
sessing  an  overpopulated  island,  vitally  interested  in  the 
export  trade  and  in  shipping,  and  particularly  adapted  for 
developing  a  huge  cotton  industry.  The  extraordinary 
development  of  the  Japanese  cotton  industry  may  be  seen 
from  the  following  figures: 


Raw  Cotton  imported  into  Japan. 


Y  ear. 

1904 

1907 

1910 

1913 

1918 


Yen. 

71,460,844 

114,034,725 

157,823,603 

231,480,883 

515,558,989 


436 


JAPAN’S  POSITION  AND  FUTURE 


In  1918  Japan  imported  raw  cotton  valued  at  more  than 
£50,000,000.  The  full  significance  of  that  fact  will  be 
clear  only  if  we  bear  in  mind  that  Japan’s  cotton  indus¬ 
try  is  of  yesterday.  In  1877  the  Japanese  Government 
ordered  experimentally  a  little  cotton  machinery  in 
England.  In  1882  the  first  joint-stock  cotton- spinning 
mill  was  created  at  Osaka.  In  1897  Japan  exported 
shirting  to  the  value  of  only  346,036  yen.  In  1917  Japan’s 
exports  of  that  commodity  exceeded  40,000,000  yen.  In 
1891  Japan  exported  cotton  yarn  to  the  value  of  7,873  yen. 
In  1917  her  yarn  exports  came  to  108,139,252  yen. 

The  United  States  Government  published  in  1918  a 
Bulletin  on  Cotton  Production  and  Distribution.  Accord¬ 
ing  to  that  publication,  cotton  consumption  in  1916-17 
was  as  follows : 


United  States 
United  Kingdom 
India 
Japan 


Bales. 

6,549,000 

4,030,000 

1,764,000 

1,850,000 


Japan  has  developed  a  truly  gigantic  cotton  industry. 
It  will  be  observed  that  the  young  cotton  industry  of  Japan 
consumed  in  1916-17  more  cotton  than  the  ancient  cotton 
industry  of  India;  that  the  United  Kingdom  consumed 
only  a  little  more  than  twice  as  much  as  the  young  Island 
Empire.  Of  course,  it  must  be  borne  in  mind  that 
England  specialises  in  the  finest  cottons,  while  Japan 
specialises  at  present  only  in  the  coarser  and  cheaper 
makes.  However,  she  is  improving  in  quality  as  well  as  in 
quantity,  and  the  time  may  be  near  at  hand  when  she  will 
become  a  formidable  competitor  to  Lancashire  even  in 
those  specialities  which  the  Manchester  district  has 
hitherto  monopolised.  During  the  War  Japanese  exports 
of  cotton  manufactures  have  grown  as  follows : 


JAPAN  S  POSITION  AND  FUTURE 


437 


1913. 


1917. 


Yen . 


Yen. 


Cotton  yarn 
Cotton  crepe 


70,997,538 

1,890,186 

11,247,594 

11,198,348 

1,330,503 

8,441,592 

2,641,576 

8,847,418 


108,139,252 

4,005,972 

10,837,392 

40,177,295 

7,380,521 

26,823,517 

3,009,676 

16,718,976 


Cotton  teacloths 
Cotton  twills 


Cotton  flannel  .  . 
Shirtings  and  sheetings 


Cotton  towels  .  . 
Cotton  hosiery  . . 


This  table  shows  most  interestingly  the  recent  develop¬ 
ment  of  the  J apanese  cotton  industry.  During  the  War 
Japan’s  exports  of  cotton  yarn  have  increased  only  by 
50  per  cent.  During  the  same  period  the  exports  of  her 
finished  manufactures  have  doubled,  have  trebled,  have 
quadrupled.  Her  exports  of  cotton  flannels  have  in¬ 
creased  no  less  than  eightfold.  It  is  perfectly  obvious  that 
Japan  is  developing  with  the  utmost  energy  the  exporta¬ 
tion  of  the  more  highly  finished  cotton  manufactures  in 
which  Lancashire  has  hitherto  enjoyed  practically  a 
monopoly. 

It  is  worth  noting  whence  Japan  obtains  her  raw  cotton. 
In  1917  she  imported  the  raw  produce  from  the  following 
countries : 


Y  en. 

204,311,120 

30,596,309 

10,848,008 

84,085,431 

1,135,213 


From  British  India 
From  China 
From  Egypt 

From  the  United  States  . 
From  all  other  countries . 


Total 


330,976,081 


It  will  be  observed  that  at  present  Japan  receives  the 
bulk  of  her  raw  cotton  from  British  India.  Conceivably 
the  time  may  come  when  India  may  wish  to  manufacture 


29 


438 


JAPAN’S  POSITION  AND  FUTURE 


her  own  cotton,  when  Japan  may  be  forced  to  draw  her 
cotton  either  from  the  United  States,  where  she  has  to 
compete  with  the  American  and  English  buyers,  or  to 
develop  cotton-growing  either  in  her  possessions  or  in 
China. 

During  the  War  Japan  has  mightily  expanded  her  export 
trade,  not  only  in  respect  of  cotton  manufactures,  but  in 
respect  of  other  goods  as  well.  The  following  figures 
summarise  the  development  mentioned: 


Japanese  Exports  (Yen). 


1908. 

1913. 

1917. 

Cotton  tissues  and 
yarns 

37,916,443 

108,878,520 

248,533,467 

Ores  and  metals 

23,390,739 

31,455,256 

171,873,534 

Metals  and  manufac¬ 
tures  thereof 

3,451,208 

.  ' 

3,584,662 

29,381.289 

Machinery 

5,720,381 

6,448,046 

117,744,871 

It  will  be  noticed  that  between  1908  and  1913  Japan’s 
exports  of  cotton  tissues  and  yarns  have  roughly  trebled, 
while  her  exports  of  ores  and  metals,  of  metal  manufactures 
and  machinery,  were  practically  stationary.  During  the 
War,  Japan's  exports  of  cotton  manufactures  have  a  little 
more  than  doubled,  but  her  exports  of  ores  and  metals 
have  increased  nearly  sixfold,  those  of  metal  manufactures 
more  than  eightfold,  while  her  exports  of  machinery  have 
increased  very  nearly  twentyfold.  That  development  can 
only  be  called  prodigious.  Before  the  War  Japan  was  a 
large  importer  of  machinery.  She  bids  fair  to  compete 
seriously  in  the  future  not  only  with  Manchester  and  the 
surrounding  towns,  but  even  with  Sheffield  and  Glasgow. 
That  is  perfectly  obvious  from  the  figures  given. 

The  War  has  given  a  mighty  stimulus  not  only  to  the 
Japanese  manufacturing  industries  and  export  trade,  but 


JAPAN’S  POSITION  AND  FUTURE 


439 


also  to  the  Japanese  shipping  industry.  The  extra¬ 
ordinary  and  almost  incredible  development  which  the 
J  apanese  shipping  trade  has  taken  during  the  great  struggle 
may  be  seen  from  the  following  table : 


Value  of  Goods  exported  from  Japan  (Yen). 


1904. 

1909. 

1913. 

1917. 

In  Japanese 
steamers  . . 

In  British 
steamers  . . 

In  other 
steamers  . . 

18,304,181 

155,001,625 

143,157,954 

185,311,454 

109,769,437 

114,107,053 

327,270,968 

153,040,707 

145,305,953 

1,207,638.830 

133,843,029 

147,949,385 

Total  . . 

316,463,760 

409,187,944 

625,617,628 

1,489,431,244 

In  1904  one-half  of  Japan’s  exports  was  carried  in 
British  steamers,  and  only  one- seventeenth  of  Japan’s 
exports  was  carried  in  Japanese  steamers.  In  1 90  9  British 
steamers  carried  only  one-fourth  of  Japan’s  exports,  and 
Japanese  steamers  carried  one-half  of  these  exports.  In 
1913,  the  year  preceding  the  War,  England’s  share  in  the 
Japanese  export  trade  was  still  one-fourth,  as  in  1909,  and 
Japan’s  share  was  still  approximately  one-half.  In  1917 
nearly  nine- tenths  of  Japan’s  exports  wyere  carried  in 
Japanese  steamers,  and  the  insignificant  remainder  was 
shared  fairly  equally  between  British  and  other  steamers. 
The  War  gave  to  the  Japanese  merchant  marine  virtually 
a  monopoly  in  the  Japanese  trade. 

The  Japanese  have  managed  their  merchant  marine 
with  consummate  skill  and  wisdom,  and  with  wonderful 
energy.  Instead  of  distributing  their  war  earnings  in  the 
form  of  dividends,  the  J  apanese  have  invested  their  profits 
partly  in  new  tonnage,  partly  have  they  used  them  for 
creating  a  vast  reserve  fund.  Between  1908  and  1917  the 


440 


JAPAN’S  POSITION  AND  FUTURE 


gross  tonnage  of  the  Japanese  shipping  companies  has 
increased  from  564,179  tons  to  1,127,483  tons,  or  has 
doubled.  During  the  same  period  net  earnings  have 
increased  from  3,847,139  yen  to  143,143,073  yen,  or  have 
grown  about  fortyfold.  J apanese  shipping  dividends  have 
increased  during  the  period  under  consideration  from 
4,210,300  yen  to  72,004,643  yen,  while  the  reserve  fund 
of  the  shipping  companies  has  increased  from  22,019,382 
yen  to  126,016,590  yen.  In  1917  the  Japanese  shipping 
company  possessed  a  reserve  fund  exceeding  £12,000,000. 
The  bulk  of  their  war  earnings  was  put  to  reserve,  and  that 
gigantic  reserve  will  no  doubt  come  into  play  during  the 
peace. 

Japan  has  a  number  of  very  great  advantages  in  the 
shipping  trade,  and  especially  in  the  shipping  trade  of  the 
Far  East.  Owing  to  the  lowness  of  wages  paid  in  the 
Japanese  yards,  Japanese  shipping  is  far  cheaper  than 
European  shipping.  Moreover,  the  Japanese  ships  can 
be  handled  far  more  cheaply  than  European  ships,  because 
sailors’  wages  are  exceedingly  low.  Lastly,  Japanese 
shipowners  enjoy  Government  support,  and  they  are  will¬ 
ing  to  work  with  little  profit,  even  at  no  profit,  if  they  can 
thereby  increase  the  strength  of  their  shipping  and  the 
prestige  of  their  country.  The  competition  of  Japanese 
shipping  will  prove  as  successful  as  Japanese  competition 
has  proved  in  the  cotton  trade.  The  Final  Report  of  the 
Departmental  Committee  of  the  Board  of  Trade  on  the 
Shipping  and  Shipbuilding  Industries  after  the  War  stated : 

In  the  Eastern  trades  (including  the  Indian  coastal 
trade)  the  heavy  subsidies  paid  by  the  Japanese  Govern¬ 
ment  to  the  Japanese  lines  have  rendered  the  competition 
of  the  latter  very  formidable.  The  present  withdrawal  of 
British  ships  from  the  East  on  a  large  scale  must  inevitably 
render  Japanese  competition  a  factor  of  serious  conse¬ 
quence  after  the  War ;  important  trades  between  foreign 


JAPAN’S  POSITION  AND  FUTURE 


441 


countries,  such  as  that  between  the  United  States  and  the 
Far  East,  whence  almost  all  British  ships  have  been  with¬ 
drawn,  may  be  captured  entirely  by  the  Japanese.  It 
must  be  recognised  that  the  competition  of  American, 
Japanese,  and  neutral  flags  in  all  the  trades  of  the  world 
will  be  much  accentuated  after  the  War. 

We  wish  to  draw  special  attention  to  the  position  of 
Japanese  shipping.  It  appears  to  us  that  geographical  and 
economic  conditions  favour  a  formidable  expansion  of 
Japanese  sea-power  throughout  the  Pacific  and  the  East, 
and  we  think  that  developments  in  this  part  of  the  world 
should  be  watched  by  H.M.  Government  in  the  years 
following  the  conclusion  of  peace. 

The  industrial,  commercial,  and  shipping  activity  of 
Japan  has  only  begun.  Japan  is  a  poor  island  country, 
and  on  the  narrow  territory  of  the  Japanese  dwell  nearly 
60,000,000  people  who  are  animated  by  the  desire  to  en¬ 
hance  the  glory,  power,  and  wealth  of  their  country,  and 
who  are  driven  by  necessity  to  make  a  living  by  developing 
their  manufacturing  industries,  foreign  trade,  and  mer¬ 
chant  marine  to  the  utmost.  It  cannot  be  doubted  that 
the  Japanese  are  destined  to  be  the  English  of  the  Far 
East.  Industrially  and  commercially  they  are  bound  to 
take  England’s  place  in  the  countries  near  at  hand.  Of 
course,  the  Japanese  have  a  particular  advantage  over 
England  and  all  the  Western  nations  in  the  gigantic 
Chinese  market.  Racially  the  Japanese  are  totally  dif¬ 
ferent  from  the  Chinese,  but  they  can  understand  the 
Chinese  more  easily  than  Europeans  because  they  also  are 
Easterners,  and,  before  all,  because  they  can  easily  learn 
the  Chinese  language.  They  find  it,  therefore,  compara¬ 
tively  easy  to  make  themselves  understood  in  that  gigan¬ 
tic  country.  Besides,  they  are  near  at  hand,  while  the 
Europeans  and  Americans  are  far  away.  Last,  but  not 
least,  the  Japanese  have  acquired  a  great  prestige  in  China. 
For  all  these  reasons  the  Chinese  markets  are  likely  to  fall 


442 


JAPAN’S  POSITION  AND  FUTURE 


more  or  less  completely  under  Japanese  control.  The 
only  question  is  whether  the  Japanese  will  completely 
dominate  the  Chinese  markets  within  a  decade  or  within 
two  or  three  decades. 

British  and  American  labour  demands  high  wages,  wages 
the  payment  of  which  makes  free  competition  impossible 
with  Japanese  labour.  It  is  as  unlikely  that  Japan  will 
adopt  Western  wages  as  that  England  and  the  United 
States  will  adopt  Japanese  wages.  In  view  of  the  fact 
that  Japan  is  able  to  compete  with  machinery  and  organi¬ 
sation  as  perfect  as  European  and  American  machinery 
and  organisation  by  means  of  labour  which  is  paid  only  a 
tithe  of  British  and  American  wages,  it  seems  only  natural 
that  British  and  American  labour  should  wish  to  reserve 
the  national  markets  to  domestic  industry.  Japan,  after 
having  completed  the  economic  conquest  of  China,  may 
begin  and  complete  the  economic  conquest  of  India.  That 
would  be  Lancashire’s  ruin,  for  the  bulk  of  Lancashire’s 
manufactures  are  sold  in  that  country.  It  is  only  reason¬ 
able  that  Japan  strives  to  dominate  with  her  manufactures 
the  Chinese  market,  but  it  is  equally  reasonable  that  the 
Indian  market  should  be  reserved  to  the  inhabitants  of  the 
Empire.  China  should  be  large  enough  for  the  Japanese. 
Besides,  they  would  no  doubt  not  desire  to  bring  about 
Lancashire’s  ruin.  There  is  room  enough  in  the  Far  East 
for  all  comers,  but  their  spheres  of  economic  activity  should 
be  marked  out  in  time,  so  as  to  avoid  unnecessary  and 
regrettable  misunderstandings. 


CHAPTER  XVIII 


THE  BRITISH  COAL  PROBLEM  AND  THE  SANKEY 

REPORT 

In  the  present  era,  the  industrial  era,  when  a  single  artisan 
can  do  the  work  of  a  large  number  of  workers  with  the 
help  of  powerful  machinery,  the  prosperity  and  progress  of 
nations  depend  on  the  use  of  an  abundance  of  cheap  power. 
Hitherto  power  for  driving  machinery  has  been  chiefly 
generated  from  coal.  In  future  it  may  be  generated 
chiefly  from  waterfalls. 

The  United  Kingdom,  the  United  States,  and  Germany, 
became  the  richest,  the  most  industrial,  the  most  pro¬ 
gressive,  and  the  most  powerful  nations  chiefly  because 
Providence  had  given  them  a  superabundance  of  power 
in  the  shape  of  plentiful  and  cheap  coal.  The  economic 
predominance  of  these  three  States  is  due  to  coal.  In  1 91 3 
the  United  Kingdom,  the  United  States,  and  Germany 
combined  produced  80  per  cent,  of  the  world’s  coal.  India 
and  the  British  Dominions  produced  an  additional  5  per 
cent.  All  the  remaining  nations  combined  produced  only 
15  per  cent. 

Before  the  advent  of  the  steam-engine  England’s 
population  was  almost  stationary.  In  1801  England 
and  Wales  had  8,872,980  inhabitants,  and  France  had 
27,500,000  inhabitants.  Owing  to  her  wealth  in  coal, 
England’s  industries  have  since  then  developed  so  mightily 
that  the  population  of  England  and  Wales  has  increased 
more  than  fourfold  since  1801.  France’s  relative  stagna- 

443 


444 


THE  BRITISH  COAL  POSITION 


tion  in  population  is  no  doubt  largely  due  to  the  stagna¬ 
tion  of  her  industries,  and  her  industrial  stagnation  is 
probably  chiefly  due  to  the  fact  that  she  has  little  coal, 
and  that  her  coal  is  very  expensive,  because  it  occurs  in 
thin  and  irregular  layers  which  are  very  difficult  to  work. 

As  coal  means  power,  the  material  progress  and  economic 
position  of  modern  nations  can  be  measured  by  their  coal- 
production.  Since  1865  the  production  of  coal  and 
lignite  of  the  three  great  industrial  States  has  increased  as 
follows  • 


Year. 

United  States. 

Germany. 

United  Kingdom. 

1865  .. 

24,790,000 

28,330,000 

99,760,000 

1880  .. 

66,830,000 

50,120,000 

149,380,000 

1895  .. 

177,590,000 

103,960,000 

193,350,000 

1913  .. 

504,520,000 

273,650,000 

287,410,000 

In  1865  the  United  Kingdom  produced  about  twice  as 
much  coal  as  the  United  States  and  Germany  combined. 
At  that  time  England  absolutely  dominated  the  industries 
of  the  world,  owing  to  her  supremacy  in  coal.  Since  then 
industrial  supremacy  has  gone  to  the  United  States.  In 
1913  the  United  States  alone  produced  twice  as  much  coal 
as  the  United  Kingdom,  while  Germany  had  approached 
the  United  Kingdom  in  coal  production  and  in  industrial 
power  and  in  wealth  as  well. 

The  progress  of  industrial  nations  depends  upon  power, 
upon  coal.  Since  1865  British  coal-production  has  grown 
threefold,  German  coal- production  tenfold,  and  American 
coal-production  twentyfold.  The  vast  progress  of  the 
United  States  in  population  and  wealth  is  largely  due  to 
her  vast  supply  of  cheap  coal,  for  two-thirds  of  the  income 
of  the  United  States  is  derived  from  the  manufacturing 


THE  BRITISH  COAL  POSITION 


445 


industries,  and  only  one-third  from  agriculture,  mining, 
forestry,  and  fishing  combined. 

The  United  Kingdom  became  the  chief  seat  of  the  manu¬ 
facturing  industries  and  the  greatest  centre  of  the  world’s 
shipping  trade  principally  because  it  dominated  the  world 
in  coal.  In  1 845  Great  Britain  produced  two- thirds  of  the 
world’s  coal.  In  1865  she  still  produced  one-half  of  the 
world’s  coal.  In  1913  she  produced  only  one-fourth  of 
the  world’s  coal.  The  position  of  the  country  is  becoming 
precarious. 

Great  Britain  lives  chiefly  by  industry  and  trade.  As 
her  natural  resources  are  only  small,  her  export  trade  and 
her  shipping  trade  are  of  the  very  greatest  importance  to 
the  people,  for  the  imported  food  and  raw  material  must 
be  paid  for  with  exports  or  with  services.  It  is  obvious 
that  the  British  manufacturing  industries  and  the  shipping 
industry  can  subsist  only  as  long  as  they  are  able  to  com-  . 
pete  successfully  with  their  foreign  rivals,  and  their  ability 
to  compete  with  the  powerful  foreign  industries  depends 
largely  on  the  price  of  coal. 

In  the  pursuit  of  the  manufacturing  industries,  com¬ 
merce,  and  shipping,  Great  Britain  labours  under  very 
serious  disadvantages.  She  must  import  from  oversea 
about  half  of  her  food  and  the  bulk  of  her  raw  materials, 
except  coal.  Her  iron  ore  is  poor  in  quality,  and  there¬ 
fore  uneconomic  in  use.  The  possession  of  cheap  coal  is 
her  only  great  advantage.  If  that  advantage  should  be 
destroyed,  her  industries  would  decline  and  decay,  and 
her  population  stagnate  and  dwindle.  Economically  and 
politically  as  well  she  would  sink  to  the  rank  of  a  third- 
rate  Power. 

The  prosperity  of  England’s  shipping  also  depends  upon 
cheap  coal.  The  coal  bill  is  an  exceedingly  important 
item  in  the  cost  of  running  ships.  Moreover,  ocean 
freights  can  be  cheap  only  if  the  ships  travel  loaded  both 


446 


THE  BRITISH  COAL  POSITION 


ways.  England  receives  vast  quantities  of  food  and  raw 
material,  and  the  ships  bringing  these  frequently  leave 
laden  with  coal,  for  England’s  manufactured  exports  are 
of  little  bulk.  If  the  British  coal  exports  should  be  de¬ 
stroyed,  if  cheaper  American  coal  should  replace  British 
coal  in  the  markets  of  the  world,  the  freights  to  and  from 
Great  Britain  would  rise,  and  with  them  would  increase 
the  cost  of  the  imported  food  and  raw  material,  to  the 
great  harm  of  the  manufacturing  industries  and  of  the 
people. 

Although  the  United  Kingdom  possesses  an  abundance 
of  coal,  the  best  layers  are  rapidly  becoming  exhausted. 
From  year  to  year  she  has  to  rely  upon  deeper  and  upon 
thinner  seams,  which  are  more  expensive  to  work.  In 
coal-getting  Great  Britain  suffers  from  the  disadvantage 
that  other  States  possess  a  more  plentiful  supply  of  thick 
seams  near  the  surface,  and  that  her  competitors,  especi¬ 
ally  the  United  States  and  Germany,  have  an  abundance 
of  cheap  timber  suitable  for  pit-props. 

The  United  States,  France,  Italy,  Switzerland,  Sweden, 
Japan,  and  many  other  countries,  have  an  abundance  of 
waterfalls  which  may  be  made  to  furnish  cheap  electric 
power.  The  United  Kingdom  has  practically  no  water¬ 
falls.  Her  coal  is  her  only  great  resource.  Coal  is  there¬ 
fore  the  basis  of  her  industrial  prosperity.  For  Great 
Britain  coal  is  the  key  industry  of  key  industries.  It 
follows  that  England’s  position  in  the  world  depends  upon 
cheap  and  plentiful  coal.  Coal  is  the  foundation  of  her 
economic  fabric,  of  her  social  fabric,  of  her  financial 
strength,  of  her  military  and  naval  power,  of  her  great¬ 
ness,  of  her  future.  The  future  of  the  British  Empire,  as 
that  of  Great  Britain,  depends  upon  British  coal. 

The  bulk  of  the  coal  raised  is  used  in  industry  and  com¬ 
merce.  Only  a  small  portion  is  employed  for  domestic 
purposes.  According  to  the  Final  Report  of  the  Coal 


THE  BRITISH  COAL  POSITION 


447 


Conservation  Committee  (Cd.  9084),  the  home  consump¬ 
tion  of  coal  was  as  follows  in  1913: 


Ri^ilw^ys  ••  ••  •  •  ••  •• 

Tons. 

15,000,000 

Coasting  steamers  (bunkers)  . . 

2,500,000 

Factories  . . 

60,000,000 

Mines 

20,500,000 

Iron  and  steel  industries 

31,000,000 

Other  metals  and  minerals 

1,250,000 

Brick-works,  potteries,  glass-works,  and 
chemical  works 

5,750,000 

O-as-works 

18,000,000 

Domestic  v 

35,000,000 

Total  (say) 

189,000,000 

In  1 913  the  United  Kingdom  produced,  according  to  the 
Report  mentioned,  287,430,473  tons  of  coal.  It  will  be 
noticed  that  only  about  one-eighth  of  the  coal  raised  was 
used  for  domestic  purposes,  and  even  part  of  that  was 
probably  used  industrially  in  small  bakeries,  laundries, 
etc.  About  four  tons  of  coal  are  needed  to  produce  one 
ton  of  steel.  The  cotton  industry  uses  about  10,000,000 
tons  of  coal  per  year,  and  the  building  trade  about 
8,000,000  tons  per  year.  Dear  coal  is  not  so  dangerous 
because  it  affects  the  private  consumer  as  because  it 
hampers  industrial  production  all  round.  Dear  coal  means 
dear  freights  by  land  and  sea,  dear  raw  materials,  dear 
electricity,  dear  gas,  dear  iron,  dear  cotton  goods,  dear 
houses,  dear  bread. 

The  country’s  prosperity  and  strength  and  the  future 
of  the  Empire  depend  upon  cheap  and  plentiful  British 
coal.  If  we  cannot  have  a  plentiful  supply  of  cheap  coal, 
it  is  quite  useless  discussing  the  future  development  of 
industry  and  trade  and  planning  great  housing  and  land 
settlement  schemes  and  other  schemes  of  social  ameliora¬ 
tion;  for  dear  and  scarce  coal  means  poverty  and  disaster 


448 


THE  BRITISH  COAL  POSITION 


to  all,  including  the  coal-miners.  The  effect  of  perma¬ 
nently  dear  and  scarce  coal  would  be  as  fatal  to  the  people 
as  would  be  a  lost  war.  Scarce  and  dear  coal  would  be  a 
terrible  handicap.  It  would  inevitably  lead  to  the  strangu¬ 
lation  of  the  industries,  to  widespread  unemployment, 
ruin,  and  revolution. 

The  United  States  have  twenty  times  as  much  coal  as 
the  United  Kingdom.  Germany  within  her  frontiers  of 
1914  had  more  than  twice  as  much  coal  as  the  United 
Kingdom.  A  Germany  possessing  cheap  and  abundant 
coal  might  turn  her  defeat  into  victory  over  a  Great 
Britain  which  suffers  from  scarce  and  dear  coal.  Great 
Britain,  having  no  alternative  source  of  power,  depends 
for  her  existence  as  much  upon  cheap  and  plentiful  coal  as 
a  man  depends  for  his  life  upon  an  adequate  supply  of  air. 
To  the  United  Kingdom  coal  is  life. 

Formerly  coal  was  cheaper  and  more  plentiful  in  Great 
Britain  than  elsewhere.  Lately  coal  has  become  scarcer 
and  dearer  in  this  country  than  in  some  competing 
countries.  The  reason  for  this  is  obvious.  The  price  of 
coal,  as  of  most  commodities,  depends  chiefly  upon  the 
cost  of  labour.  According  to  the  official  Coal  Tables,  the 
prices  of  coal  have  changed  as  follows  between  1886  and 
1912  in  the  United  States  and  the  United  Kingdom : 


Average  Value  of  Coal  per  Ton  at  the  Pit’s  Mouth. 


¥  ear. 

United  Kingdom. 

United  States. 

s.  d. 

s. 

d. 

1886  . 

4  10 

6 

4f 

1887  . 

4  9f 

6 

6f 

1888  . 

5  Of 

6 

0 

1910  . 

8  2f 

o 

lOf 

1911  . 

8  If 

5 

lOf 

1912  . 

9  Of 

6 

1 

j 


THE  BRITISH  COAL  POSITION 


449 


It  seems  at  first  sight  inexplicable  that  coal  should  be 
cheaper  in  the  United  States  than  in  the  United  Kingdom, 
although  American  wages  are  considerably  higher  than 
British  wages.  The  reason  ot  this  apparent  contradiction 
may  be  found  in  the  following  figures,  which  are  taken 
from  the  Coal  Tables  published  by  the  Board  of  Trade: 


Coal  Produced  per  Annum  per  Person  Employed. 


Y  ear. 

1 

■  1 

In  the  United 
Kingdom. 

i 

In  the  United. 
States. 

1886-90  . 

Tons. 

312 

Tons. 

400 

1891-95  . 

271 

444 

1896-1900  . 

298 

494 

1901-05  . 

1906-10  .  .  . .  .  . 

281 

543 

275 

596 

1908  . 

271 

538 

1909  . 

266 

617 

1910  . 

257 

618 

1911  . 

260 

613 

1912  (strike  year)  .  . 

244 

660 

1913  . 

259 

L 

681 

The  two  columns  give  an  extraordinary  contrast.  In 
the  United  States  production  per  man  has  increased 
steadily  and  enormously  pari  passu  with  the  improvement 
in  mechanical  outfit,  but  during  the  same  period  produc¬ 
tion  per  man  in  the  United  Kingdom  has  steadily  declined 
notwithstanding  the  introduction  of  improved  machinery 
for  coal-getting.  The  result  is  that  an  American  mine- 
worker  produces  nearly  three  times  as  much  (exactly  two 
and  two-thirds  as  much)  as  a  British  mine-worker,  that 
one  American  does  almost  as  much  work  as  three  English¬ 
men.  The  waste  of  labour  involved  in  low  production  per 
man  makes  British  coal  more  expensive  than  American 
coal  notwithstanding  lower  British  wages. 


450 


THE  BRITISH  COAL  POSITION 


British  coal  has  steadily  become  dearer  than  American 
coal.  If  the  difference  to  England’s  disadvantage  should 
continue  increasing,  the  Americans  will  capture,  first  the 
British  coal  export  trade,  and  then  the  British  shipping 
trade  and  the  British  manufacturing  industries.  That  is 
absolutely  inevitable.  The  Coal  Conservation  Committee 
recognised  the  extreme  seriousness  of  the  position  caused 
by  the  underproduction  per  miner  in  Great  Britain.  After 
dwelling  upon  the  increase  of  production  per  man  in 
America,  and  the  continued  decrease  of  production  per 
man  in  the  United  Kingdom,  it  stated: 

Various  reasons  may  be  advanced  to  explain  the  de¬ 
crease,  but  none  of  them  can  be  regarded  as  adequate. 
The  matter  calls  for  the  most  complete  investigation  on  the 
part  of  employers  and  the  representatives  of  labour,  as  the 
future  prosperity  of  the  industry  itself  and  of  the  industrial 
position  of  the  country  generally  depends  very  largely 
upon  a  solution  of  the  problem  being  found. 

Where  there  is  any  unnecessary  restriction  of  output, 
this  should  be  removed,  and  if  such  restriction  is  in  any 
degree  due  to  a  feeling  of  insecurity  on  the  part  of  the 
workmen,  and  a  belief  that  if  they  put  forth  a  special  effort 
to  increase  production  they  will  suffer  a  reduction  in  their 
wages  rates,  a  strong  effort  should  be  made  to  remove  any 
justification  which  may  exist  for  such  a  belief. 

The  interests  of  the  employer  and  his  workmen  appear 
to  be  identical  in  this  important  matter,  and  the  fullest 
co-operation  between  them  is  required  for  the  attainment 
of  this  end.  It  is  only  by  increased  production  per  head 
of  the  persons  employed  that  our  trade  position  can  be 
maintained  and  that  improved  conditions  of  employment 
can  be  secured,  and  this  ought  to  be  recognised  by  work¬ 
men  as  well  as  by  employers. 

The  decrease  in  British  coal-production  per  man  is 
apparently  due  not  so  much  to  natural  conditions  in  the 
mines  or  to  the  action  of  the  mine- owners  as  to  the  action 
of  the  miners.  Under  the  sliding  scale  arrangement  miner ’s 


THE  BRITISH  COAL  POSITION 


451 


wages  rise  with  every  rise  of  coal  prices  and  fall  with  every 
fall  of  coal  prices.  Consequently  the  miner  is  personally 
and  pecuniarily  interested  in  bringing  about  high  coal 
prices  by  means  of  underproduction,  by  creating  an  arti¬ 
ficial  scarcity.  The  coal-owners  find  it  difficult  to  increase 
production  because,  as  the  law  stands,  miners  on  strike 
cannot  be  replaced  by  outside  labour.  Legislation  has 
made  the  miner  the  predominant  partner  in  the  mining 
business.  It  has  given  him  every  inducement  to  raise  coal 
prices  to  the  utmost  by  reducing  output,  and  has  given 
him  security  of  employment,  has  given  him  a  monopoly  of 
work  in  the  mine  in  which  he  is  occupied.  The  miner, 
having  been  made  the  predominant  partner  in  the  coal¬ 
mining  industry,  is  making  use  of  the  monopoly  by  which 
he  has  become  all-powerful  owing  to  the  absolute  depend¬ 
ence  of  the  country  upon  coal. 

In  March,  1919,  the  Committee  of  investigation  which 
had  been  appointed  by  the  Government,  and  which  was 
presided  over  by  Mr.  Justice  Sankey,  published  its  pre¬ 
liminary  report  and  recommendations.  If  Mr.  Justice 
Sankey’s  Report  on  the  Coal  Problem  was  merely  designed 
to  tide  England  over  the  coal  difficulty  and  to  patch 
temporarily  the  differences  which  had  arisen  in  the  coal 
trade  with  regard  to  wages  and  hours  of  labour,  the  recom¬ 
mendations  contained  in  it  were  of  value.  If,  on  the  other 
hand,  the  Report  was  written  with  a  view  to  base  upon  it  a 
permanent  settlement,  it  can  only  be  described  as  a  great 
disaster. 

According  to  the  estimates  given,  the  miners  will  under 
the  proposed  settlement  receive  per  annum  in  additional 
payments  a  sum  approximating  £50,000,000,  which  may 
increase  to  about  £100,000,000  if  the  projected  seven 
hours’  working  day  should  before  long  be  reduced  to  a 
six  hours’  working  day.  This  increase  in  wages  and  in  the 
price  of  coal  would  be  a  comparatively  trifling  matter  if  it 


452 


THE  BRITISH  COAL  POSITION 


involved  only  the  spending  of  money.  After  all,  people 
live,  not  by  money,  but  by,  and  on,  goods  which  are  pro¬ 
duced  for  use  and  consumption.  The  most  disastrous 
aspect  of  the  Sankey  Report  is  that  it  not  only  involves 
a  vast  extra  expenditure  at  a  time  when  economy  is  most 
urgently  needed,  but  that  in  addition  it  is  bound  to  bring 
about  a  reduced  production  of  coal  at  a  time  when  vastly 
increased  production  is  urgently  needed. 

The  Sankey  Report  stated : 

The  Seven  Hours’  Act  will  mean  that  the  men  are  under¬ 
ground,  taking  the  average,  seven  hours  and  thirty-nine 
minutes,  and  relying  upon  the  valuable  and  weighty  advice 
of  Sir  Richard  Redmayne,  the  Chief  Inspector  of  Mines, 
the  estimated  decrease  in  output  will  be  a  little  under  10 
per  cent,  per  annum. 

Of  course,  the  estimated  decrease  in  coal-production  by 
the  shortening  of  hours  might  conceivably  be  balanced  by 
more  efficient  production,  a  better  attendance  of  miners, 
etc.  On  this  point  the  Sankey  Report  stated: 

If  the  10  per  cent,  estimated  reduction  of  output  can  be 
decreased,  and  if  the  output  of  the  first  year  of  the  War — 
namely,  1914 — 266,000,000  tons,  can  be  maintained,  the 
difficulty  of  finding  the  money  will  be  greatly  minimised. 

This  paragraph  is  a  most  extraordinary  one.  We  live 
in  a  progressive  world  in  which  the  consumption  of  coal 
has  rapidly  been  increasing,  and  will  continue  increasing 
for  decades.  Yet  the  Sankey  Report  expresses  with 
extraordinary  short-sightedness  the  somewhat  vague  and 
possibly  deceptive  hope  that  British  coal-production  may 
remain  stagnant  at  a  time  when  coal-production  of  compet¬ 
ing  nations  is  likely  to  increase  by  leaps  and  bounds. 

Coal  is  the  very  life-blood  of  industrial  nations.  We 
live  in  a  competitive  world.  The  importance  of  coal  and 
the  relative  position  which  Great  Britain  occupies  in  the 


THE  BRITISH  COAL  POSITION 


453 


industrial  world,  especially  when  compared  with  the  United 
States  and  Germany,  was  exceedingly  well  expressed  in 
the  Report  to  the  Bituminous  Coal  Trade  Association  on 
the  Present  and  Future  of  the  Bituminous  Coal  Trade 
which  was  written  by  Mr.  Henry  S.  Fleming,  the  Secretary 
and  Treasurer  of  the  Bituminous  Coal  Trade  Association 
of  America,  and  published  in  1908.  In  that  interesting, 
important  document  we  read : 

The  growth  of  the  coal  industry  represents  the  growth 
of  the  civilising  influence  of  industrial  progress,  which  is, 
in  itself,  the  actual  foundation  of  our  civilisation.  Coal 
is  the  base  upon  which  all  manufacturing  industries  rest. 
Stop  the  production  of  coal,  and  the  business  of  the  world 
stops.  It  is  the  most  important  of  the  mineral  products 
of  the  earth,  and  differs  from  all  others  in  that  it  can  be 
used  for  only  one  purpose — the  production  of  energy. 

As  approximately  only  one-eighth  of  the  coal  produced  in 
theUnited  Kingdom  is  used  fordomesticpurposes,it  is  clear 
that  the  artificial  scarcity  and  dearness  of  coal  which  the 
miners  seem  likely  to  create  will  have  the  most  disastrous 
effect  upon  British  industry,  shipping,  and  commerce. 
Besides,  the  precedent  of  enforcing  increased  pay  for  de¬ 
creased  output  set  by  the  miners  may  be  adopted  by  other 
trades,  with  the  result  that  England  may  have  increased 
wages  and  decreased  production  all  round.  Prosperity 
cannot  possibly  be  created  by  increasing  wages  and  de¬ 
creasing  production,  for  men’s  prosperity  is  created,  not 
by  the  possession  of  paper  money  or  of  coin,  but  by  an 
ample  consumption  of  food,  clothes,  etc.  Of  course, 
decreased  production  and  increased  consumption  cannot 
possibly  go  together.  Besides,  the  precedent  created  by 
arbitrarily  reducing  the  income  of  the  mine- owners,  by 
confiscating  part  of  their  property,  may  before  long  be 
exploited  by  the  professional  creators  of  unrest  with  regard 
to  manufacturers,  merchants,  bankers,  shipowners,  etc. 

30 


454 


THE  BRITISH  COAL  POSITION 


For  all  we  know,  the  Sankey  Report  may  prove  the  open¬ 
ing  of  a  very  dark  chapter,  not  only  in  British  industrial 
history,  but  in  British  social  history  as  well. 

The  position  of  Great  Britain  in  the  industrial  world  and 
her  industrial  future  depend  obviously  to  a  very  large 
extent  on  an  ample  supply  of  cheap  coal,  which  is  the 
motive  force  of  practically  all  machinery  on  land  and  sea. 
With  regard  to  the  past  development  and  future  position 
of  Great  Britain  and  of  the  other  principal  manufacturing 
nations,  Mr.  Fleming  gave  in  his  excellent  report  the 
following  retrospective  summary  and  forecast  of  the  future : 


Actual  Production  (Gross  Tons). 


Year. 

United 

States. 

Great 

Britain. 

Germany. 

Total  of 
the  World. 

1870 

29,400,000 

110,400,000 

26,300,000 

218,000,000 

1880 

63,800,000 

146,900,000 

58,200,000 

331,900,000 

1890 

140,800,000 

181,600,000 

87,800,000 

502,500,000 

1900 

240,700,000 

225,100,000 

147,100,000 

755,400,000 

Estimated  Future  Production. 


Year. 

United 

States. 

Great 

Britain. 

Germany. 

Total  of 
the  World. 

1910 

1920 

1930 

1940 

1930 

433,300,000 

685,400,000 

954,800,000 

1,215,700,000 

1,456,000,000 

247,800,000 

282,600,000 

318,200,000 

354,800,000 

392,400,000 

195,500,000 

271,700,000 

360,500,000 

455,700,000 

547,900,000 

1,093,600,000 

1,572,600,000 

2,126,700,000 

2,732,100,000 

3,375,000,000 

In  1870  Great  Britain  produced  more  than  half  of  the 
world’s  coal,  and  therefore  possessed  more  than  half  of  the 
world’s  motive  power.  In  1900  she  possessed  less  than 
one- third,  and  the  United  States  had  gone  ahead  of  the 


THE  BRITISH  COAL  POSITION 


455 


United  Kingdom.  In  1913  the  United  States  produced 
twice  as  much  coal  as  Great  Britain,  and  Germany  had 
drawn  nearly  level  with  England,  although  Germany’s 
position  in  coal-production  had  been  relatively  insignifi¬ 
cant  a  few  decades  ago.  Thirty  years  are  little  in  the  life 
of  a  nation.  By  1950  the  United  States  will,  according 
to  the  very  careful  and  conservative  estimate  of  Mr. 
Fleming,  produce  four  times  as  much  coal  as  the  United 
Kingdom,  and  Germany  will  produce  150,000,000  tons 
more  than  England.  Of  course,  Mr.  Fleming’s  estimate 
was  made  before  the  possibility  of  the  legal  introduction 
of  an  eight  hours’  day  followed  by  a  seven  hours’  day  and 
six  hours’  day  for  British  miners  was  seriously  thought  of. 
If  the  extraordinary  shortening  of  the  hours  of  labour  and 
of  output  per  man  in  British  mines  should  not  be  followed 
by  a  similar  reduction  of  output  per  man  in  Germany  and 
the  United  States,  Mr.  Fleming’s  forecast  for  the  future 
may  be  completely  falsified.  By  1950  Germany,  within 
the  limits  of  1914,  may  produce  twice  as  much  coal  and 
the  United  States  five  or  six  times  as  much  coal  as  the 
United  Kingdom.  If  that  should  happen,  the  result  would, 
of  course,  be  that  Great  Britain  would  become  another 
Belgium,  that,  from  the  industrial  point  of  view,  she  would 
cease  to  be  a  Great  Power,  and  her  reduction  to  a  second- 
rate  Power  as  an  industrial  country  would  inevitably  be 
followed  by  her  sinking  to  a  second-rate  Power  position 
from  the  political,  military,  and  naval  points  of  view  as 
well.  The  British  Empire  would  be  in  danger,  for  a  second- 
rate  Power  cannot  possibly  retain  the  greatest  Empire  in 
the  world,  nor  can  it  hope  to  dominate  its  communications 
by  sea. 

In  commenting  upon  the  figures  of  past  production  of 
the  principal  coal-producing  and  industrial  nations  and 
upon  their  probable  future  output,  Mr.  Fleming  signifi¬ 
cantly  wrote : 


456 


THE  BRITISH  COAL  POSITION 


At  present  the  greater  part  of  the  foreign  demand  (for 
coal)  is  supplied  from  Great  Britain,  but  the  coal  resources 
of  that  country  are  being  steadily  and  rapidly  depleted, 
and  its  ability  to  meet  the  increasing  foreign  demand  being 
reduced  .  .  .  which  would  mean  either  imports  into 
Great  Britain  to  make  up  the  deficit,  or  that  country’s 
inability  to  supply  foreign  requirements.  In  either  case 
the  United  States  or  Germany  are  the  only  other  countries 
in  a  position  to  produce  a  surplus.  .  .  . 

Already  there  are  marked  indications  of  the  entrance  of 
the  United  States  into  the  foreign  export  business  on  a 
large  scale.  .  .  .  Whenever  any  labour  or  other  causes 
disturb  British  mine  conditions  there  is  a  rush  of  inquiries 
from  foreign  buyers  to  American  producers,  and  while  the 
actual  orders  and  shipments  have  not  yet  reached  any 
considerable  tonnage,  the  wedge  has  entered,  entered  to 
stay,  and  is  gradually  forcing  the  opening  wider.  .  .  . 
Whether  we  want  it  or  not,  the  foreign  demand  for  our 
coal  will  come,  and  will  increase  steadily  and  surely. 

These  wrords  were  written  and  published  in  1908,  before 
the  legal  establishment  of  an  eight  hours’  day,  of  a  seven 
hours’  day,  and  of  a  six  hours’  day,  in  British  mines  was 
seriously  thought  of.  But  already  then  it  was  clear  to 
American  experts  that  the  United  States  or  Germany,  or 
both,  would  take  Great  Britain’s  place,  because  they  pos¬ 
sess  not  only  a  larger  store  of  coal  than  the  United  King¬ 
dom,  but  also  because  their  coal-beds  contain  thicker 

•  i  -  .  i  w  * 

seams,  which  can  therefore  more  easily  and  more  cheaply 
be  exploited.  If  to  the  natural  handicap  of  a  smaller  store 
of  coal  and  of  thinner  layers  of  the  mineral  occurring  at  a 
greater  depth  should  be  added  the  artificial  handicap  of  a 
legally  enforced  seven  hours’  day,  which  may  be  followed 
by  a  legal  six  hours’  day,  for  miners,  the  position  will 
become  absolutely  disastrous  for  the  British  industries 
and  for  British  prosperity. 

The  question  arises,  of  course,  whether  the  seven  hours’ 
day,  or  the  six  hours’  day,  represents  the  final  limit  of  the 
miners'  demands,  or  whether  we  shall  hear  presently 


THE  BRITISH  COAL  POSITION 


457 


demands  for  a  five  hours’  day  and  a  four  hours’  day,  and 
still  further  increased  wages.  Furthermore,  the  question 
must  be  considered  whether  reduced  hours  and  increased 
wages  will  lead  to  an  increased  output  per  man  per  hour, 
either  by  greater  exertion  on  the  part  of  the  miners  or  by 
the  introduction  of  labour-saving  machinery.  While  the 
yearly  or  daily  output  per  miner  has  rapidly  increased  in 
the  United  States,  in  the  British  Dominions,  in  Germany, 
and  in  many  other  countries,  British  output  per  miner  has 
steadily  decreased.  Unfortunately,  the  British  miner  is, 
under  the  sliding  scale  arrangement,  a  beneficiary  of  high 
coal  prices.  The  higher  coal  prices  soar,  the  larger  are 
his  wages,  and  he  knows  enough  of  political  economy  to  be 
aware  that  coal  can  be  made  dear  by  making  it  scarce. 
Consequently  it  is  to  be  feared  that  he  may  continue  his 
old  policy  of  keeping  the  output  low. 

In  former  decades  British  coal  was  considerably  cheaper 
than  American  coal.  During  the  years  preceding  the  W ar 
British  coal  had  become  50  per  cent,  dearer  than  American 
coal,  because  of  the  low  production  per  miner  in  Great 
Britain.  In  1919  British  coal  was  about  twice  as  dear  as 
American.  In  the  future  the  difference  in  favour  of 
America  may  be  still  greater.  If,  as  appears  likely,  a 
reduction  of  hours  and  increase  of  pay  will  be  successfully 
demanded  by  the  British  railway  and  transport  workers 
as  well,  freights  also  will  be  increased.  The  time  may 
therefore  be  near  at  hand  when  the  United  Kingdom  will 
no  longer  be  able  to  export  coal,  for  there  is,  of  course,  a 
limit  to  the  export  bounties  which  the  British  Government 
can  pay.  The  time  may  be  near  at  hand  when  America 
will  be  able  not  only  to  take  England’s  place  as  a  coal 
exporter  to  neutral  countries,  but  when  she  will  supply 
the  British  Islands  as  well  with  part  of  the  necessary  fuel 
at  those  high  prices  which  the  exactions  of  the  miners  seem 
likely  to  establish. 


458 


THE  BRITISH  COAL  POSITION 


The  miners  have  based  their  demands  for  shorter  hours 
and  higher  wages  on  the  miserable  conditions  under  which 
they  are  living,  on  the  inadequacy  of  their  houses,  etc.  Of 
-  course,  the  miners’  living  conditions  should  be  made  as 
comfortable  and  pleasant  as  is  possible.  The  miner’s  lot 
is  no  doubt  a  hard  one.  However,  it  is  untrue  that  his  lot 
is  harder  than  that  of  other  workers.  If  the  miner’s  life 
were  indeed  a  life  of  misery,  the  miners  would  abandon 
their  trade  for  other  trades,  and  workers  engaged  in  more 
pleasant  callings  would  shun  the  mines.  This  is  not  the 
case.  It  is  extremely  rare  to  find  miners  abandoning  their 
mines  for  more  pleasant  occupations.  On  the  other  hand, 
hundreds  of  thousands  of  clerks,  agricultural  labourers, 
and  other  workers,  have  gone  during  the  last  few  years  into 
the  coal-mines.  The  movement  of  the  outside  workers 
towards  the  mines  and  the  absence  of  a  movement  of  the 
mine-workers  away  from  the  mines  shows  that  mining  is 
an  exceedingly  attractive  occupation  both  to  the  mine- 
workers  themselves  and  to  outsiders. 

It  seems  vain  to  hope  that  the  effect  of  the  policy  pur¬ 
sued  by  the  British  miners  and  their  supporters  will  be 
counterbalanced  by  similar  demands  for  shorter  hours, 
decreased  production,  and  higher  pay,  in  Germany  and 
the  United  States.  In  Germany  the  policy  of  reducing 
output  has  in  the  past  been  little  practised  by  the  workers, 
and  in  the  United  States  it  is  almost  unknown.  Besides, 
the  American  coal-fields  are  so  gigantic — their  area  is  four 
times  as  large  as  that  of  the  whole  of  the  United  Kingdom 
— that  a  combination  of  the  miners  for  the  purpose  of 
artificially  restricting  output  would  be  very  difficult  to 
create.  Last,  but  not  least,  the  mine -workers  in  the 
United  States  are  chiefly  immigrants  from  South-Eastern 
Europe  and  from  other  countries,  are  men  who  speak 
different  languages,  who  receive  a  pay  far  higher  than 
they  ever  dreamt  of  in  their  old  homes,  and  who  therefore 


/ 


THE  BRITISH  COAL  POSITION  459 

cannot  be  easily  converted  into  a  well- disciplined  and 
homogeneous  industrial  army  similar  to  that  which  is 
commanded  by  Mr.  Smillie.  The  American  manufacturers 
and  the  American  nation  seem  absolutely  determined  to 
have  cheap  coal.  Hence  the  American  Government  has  in 
the  past  destroyed  every  attempt  at  making  coal  artifici¬ 
ally  scarce  and  dear.  They  will  probably  continue  the 
policy  of  cheapness  and  plenty  with  regard  to  coal.  The 
result  of  cheap  and  plentiful  coal  in  America,  and  possibly 
in  Germany  as  well,  and  of  scarce  and  dear  coal  in  the 
United  Kingdom,  would  undoubtedly  prove  disastrous  to 
the  British  industries  and  the  British  people.  It  is  to  be 
hoped  that  the  disastrous  effect  of  creating  an  artificial 
scarcity  of  coal,  which  may,  and  probably  will,  be  followed 
by  attempts  to  create  an  artificial  scarcity  in  other  in¬ 
dustries  as  well,  will  prove  even  to  the  blindest  the  disas¬ 
trous  folly  of  trying  to  create  universal  prosperity  by 
creating  a  universal  scarcity. 


CHAPTER  XIX 


THE  DEVELOPMENT  OF  THE  BRITISH  RAILWAYS, 
WATERWAYS,  AND  ROADS 

The  greatness  and  wealth  of  the  Roman  Empire  was  based 
upon  its  magnificent  system  of  roads.  The  wealth  and 
power  of  modern  States  is  based  upon  their  railroads.  The 
marvellous  progress  of  the  United  States  is  chiefly  due  to 
the  magnificent  railways  of  the  country,  for  its  vast 
resources  could  not  have  been  developed  without  their 
help.  The  British  Empire  is  more  than  four  times  as  large 
in  area  as  the  United  States.  Yet  the  railway  mileage  of 
the  Empire  is  only  half  as  great  as  that  of  the  United 
States.  In  1913  the  two  great  Anglo-Saxon  countries 
compared  as  follows : 

British  Empire  ..  ..  134,131  miles  of  railway. 

United  States  ..  ..  251,984  ,,  ,, 

England  was  the  pioneer  in  railroading,  but  she  occupies 
no  longer  the  foremost  position  in  the  railway  world.  She 
has  fallen  behindhand  not  only  in  the  development  of 
railways  in  the  far-flung  Empire,  but  even  in  the  home¬ 
land.  The  great  characteristic  of  the  British  home  rail¬ 
ways  is  their  backwardness  and  their  inefficiency.  While 
the  railways  of  other  countries  have  rapidly  advanced, 
the  British  railways,  broadly  speaking,  have  stood  still, 
especially  in  that  most  important  branch  of  railroading, 
the  handling  of  freight.  The  progress  of  the  British  rail¬ 
ways  has  taken  chiefly  the  direction  of  improving  the 

460 


BRITISH  RAILWAYS,  CANALS,  AND  ROADS  461 

relatively  little  important  passenger  service.  The  freight 
service  is  still  carried  on  by  means  of  toy  trains  and  toy 
trucks  over  toy  bridges  and  through  toy  tunnels,  up  and 
down  steep  gradients  and  round  narrow  curves,  as  was 
done  in  the  dark  and  early  days  of  railroading. 

It  is  no  exaggeration  to  say  that,  as  regards  freights, 
Great  Britain  has  the  most  costly  and  the  most  inefficient 
railway  service  in  the  world.  On  British  railways  toy 
trucks,  designed  to  carry  4,  5,  6,  or  8  tons  of  goods,  are 
still  common.  The  truck  most  frequently  seen  holds  10 
tons.  British  train-loads  are  supposed  to  average  approxi¬ 
mately  100  tons.  A  train-load  of  150  tons  is  considered 
to  be  very  satisfactory.  Mineral  trains  conveying  500  or 
600  tons  with  the  help  of  two  engines  are  rare.  Toy  trucks 
and  toy  trains  involve  an  enormous  waste  of  money  and  of 
labour.  An  engine-driver  can  as  easily  run  a  heavy  train 
as  a  light  one.  Numerous  small  trucks  not  only  involve 
the  handling  of  a  large  quantity  of  dead  weight,  but  lead 
to  a  needless  multiplication  of  shunters,  book-keepers, 
checkers,  repairers,  etc.  While  in  the  United  Kingdom 
a  train-load  of  100  or  150  tons  is  considered  satisfactory 
and  a  mineral  train-load  of  500  or  600  tons  exceptional, 
American  trains  conveying  3,000  tons  of  minerals  by 
means  of  a  single  engine  are  common,  and  train-loads 
of  5,000  tons  are  not  unknown. 

The  rapid  development  of  the  German  industries  was  un¬ 
doubtedly  largely  due  to  the  excellence  of  their  railway 
system,  and  particularly  to  the  efficiency  of  the  freight¬ 
handling  branch.  In  Germany,  as  in  the  United  States, 
gradients  were  abolished,  the  permanent  way  was  strength¬ 
ened,  and  everything  was  done  to  enable  the  country  to 
move  heavier  train-loads.  The  constant  improvement 
in  the  mechanical  outfit  led  to  a  gradual  reduction  in 
freights.  While  before  the  War  British  freights  were  by 
far  the  highest  in  the  world  and  tended  to  increase  to  the 


462  BRITISH  RAILWAYS,  CANALS,  AND  ROADS 


disadvantage  of  the  national  industries  and  the  national 
trade,  German  and  American  freights  were  comparatively 
moderate  and  tended  to  decrease.  The  advantage  of  short 
distances  possessed  by  the  United  Kingdom  was  destroyed 
by  the  inefficiency  of  the  British  railways.  That  ineffici¬ 
ency  was  noticeable  not  only  in  their  mechanical  outfit, 
but  in  other  directions  as  well. 

While  the  railroads  in  progressive  countries  were  run 
chiefly  for  the  benefit  of  the  national  industries,  the  British 
railways  were  managed  principally  for  the  benefit  of  the 
shareholders,  or  rather  for  their  supposed  benefit.  Many 
British  railway  boards  were  composed  of  superannuated 
capitalists,  not  of  able  business  men.  The  actual  manage¬ 
ment  of  the  railways  was  left  in  the  hands  of  a  manager 
who  received  little  or  no  assistance  from  directors  who  did 
not  direct. 

Although  the  railways  were  nominally  run  for  the 
interest  of  the  shareholders,  they  were  only  too  frequently 
managed  in  the  interests  of  share-pushers  and  company 
promoters.  Insufficient  attention  was  given  to  the  develop¬ 
ment  of  industry.  Lines  and  stations  were  unnecessarily 
duplicated  and  triplicated.  Hence,  many  small  country 
towns  have  two  or  three  competing  stations.  In  every 
town  countless  railway  receiving  offices  were  planted  in 
the  most  expensive  locations.  The  politicians  in  Parlia¬ 
ment  encouraged  cut-throat  competition  among  the  rail¬ 
ways,  and  favoured  the  unnecessary  duplication  of  lines, 
stations,  etc.,  believing,  or  pretending  to  believe,  that 
competition  would  cheapen  railway  freights  and  fares. 
Of  course,  it  did  neither.  The  unnecessary  doubling  and 
trebling  of  lines  merely  added  to  the  dead  weight  of  the 
railway  capital  upon  which  interest  had  to  be  earned. 
Therefore  it  added  to  the  cost  of  transportation.  More¬ 
over,  the  competing  railways  were  quite  as  anxious  to 
hamper  their  competitors  as  to  develop  their  own  system. 


BRITISH  RAILWAYS,  CANALS,  AND  ROADS  463 

Consequently  vast  amounts  of  money  were  spent  by  them 
in  economic  warfare,  to  the  disadvantage  of  both  the  share¬ 
holders  and  of  the  railway-using  public. 

The  inefficiency  of  the  British  railways  may  be  seen  not 
only  in  their  totally  antiquated  mechanical  outfit  and 
organisation  and  in  the  planless  and  confused  arrangement 
of  lines,  but  also  by  their  book-keeping.  A  large  and  well- 
organised  business  requires  clear  and  full  data  by  which 
revenue  and  expenditure  may  be  checked.  All  modern 
States  possess  a  highly  developed  system  of  railway 
accounting  by  means  of  which  the  exact  cost  of  moving  a 
ton  of  freight  over  a  given  distance  can  be  ascertained. 
No  such  figures  exist  for  the  United  Kingdom.  The  rail¬ 
ways  themselves  do  not  know  what  the  cost  of  transporta¬ 
tion  comes  to.  The  railway  accounts  are  as  confused  as 
the  whole  railway  system.  In  1886  Mr.  J.  S.  Jeans  read  a 
paper  on  railway  traffic  before  the  Statistical  Society  in 
which  he  stated  : 

The  average  transport  charges  may  be  ascertained  for 
every  European  country  except  our  own,  as  regards  both 
goods  and  passenger  traffic.  In  Great  Britain  the  rail¬ 
ways,  whether  by  accident  or  by  design,  have  hitherto 
contrived  to  make  it  impossible  for  the  public  to  discover 
the  average  charges  for  the  transport  of  either  the  one  or 
the  other,  for  any  one  railway  or  for  the  country  as  a  whole. 

The  British  railways  have  greatly  damaged  the  indus¬ 
tries  of  the  country,  not  only  by  their  general  inefficiency, 
but  also  by  their  freight  policy.  They  act  on  the  principle, 
“  Charge  what  the  traffic  will  bear.”  Where  there  is  little 
competition  high  freights  are  charged ;  where  there  is  much 
competition  low  freights  are  charged.  The  result  is  that 
in  some  instances  freights  are  outrageously  high,  and  in 
others  unduly  low.  The  railways  are  so  anxious  to  obtain 
traffic  that  they  are  willing  to  work  at  a  loss.  For  in¬ 
stance,  they  carry  at  a  loss  goods  around  the  coast  in  order 


464  BRITISH  RAILWAYS,  CANALS,  AND  ROADS 


to  prevent  these  goods  from  going  by  coast- wise  shipping. 
Of  course,  they  compensate  themselves  for  such  a  loss  by 
charging  unduly  high  rates  on  other  goods.  Therefore, 
they  harm  at  the  same  time  the  coast- wise  shipping  trade 
and  the  general  body  of  home  producers.  From  the 
national  point  of  view  it  is,  of  course,  uneconomic  to  divert 
freight  from  the  natural  route  around  the  coast  to  an 
artificial  route. 

In  order  to  attract  traffic,  railways  will  not  merely  carry 
goods  but  fetch,  store,  and  deliver  them.  However,  as 
they  do  not  charge  separately  for  storage,  etc.,  those  who 
take  advantage  of  these  facilities  are  benefited  at  the 
cost  of  those  traders  who  wish  merely  to  forward  goods 
by  train. 

The  railways  have  damaged  British  industry  and  trade 
very  seriously  by  favouring  the  foreigner,  acting  on  the 
principle  that  foreign  goods  can  be  induced  to  come  to  the 
country  only  if  particularly  cheap  freights  are  offered  for 
their  conveyance.  According  to  the  law,  they  could  not 
offer  to  carry  foreign  goods  more  cheaply  than  British 
goods.  So  the  railways  got  round  the  provisions  of  the 
law  by  differentiating  unduly  in  respect  of  large  and  of 
small  quantities.  Foreign  farm  produce,  manufactures, 
etc.,  arrive  in  bulk,  while  British  farm  produce,  etc.,  comes 
to  the  railroad  in  comparatively  small  quantities.  The 
result  is  that  foreign  goods  were  dumped  in  the  country, 
and  British  farmers  and  manufacturers  were  frequently 
unable  to  compete  with  their  foreign  rivals. 

An  improvement  of  the  British  railway  system  can  be 
hoped  for  only  if  the  railways  are  placed  under  unified 
control,  if  the  system  which  has  divided  the  country  into 
numerous  railway  provinces  is  abandoned,  and  if  a  truly 
national  and  unified  system  of  transport  is  created  out  of 
the  confused  and  wasteful  competitive  system.  That  was 
recognised  by  various  official  Commissions  and  Committees. 


BRITISH  RAILWAYS,  CANALS,  AND  ROADS  465 


For  instance,  the  Select  Committee  on  Transport,  which 
reported  in  1918,  stated: 

Evidence  has  been  given  by  members  of  the  Railway 
Executive  Committee  to  the  effect  that  if  a  policy  of  uni¬ 
fication  of  management,  combined  with  a  pooling  of  assets 
of  the  railway  companies,  were  adopted,  it  should  be 
possible  to  give  the  public  better  service  and  facilities  at 
less  cost  to  the  railway  system. 

From  a  purely  technical  point  of  view,  it  appears,  there¬ 
fore,  to  be  desirable  that  there  should  be  a  unification  of 
ownership,  not  merely  unification  of  management,  of  the 
main  rail  way  systems,  because,  while  unification  of  manage¬ 
ment  would  undoubtedly  be  a  great  improvement  upon 
pre-war  conditions,  and  would  assist  materially  to  secure 
more  efficient  organisation  and  management,  it  would  not, 
without  unification  of  ownership,  permit  of  the  use  of  the 
assets  of  the  combined  system  to  the  best  advantage,  nor 
allow  of  the  provision  of  new  and  costly  equipment  without 
constantly  giving  rise  to  undesirable  financial  negotiations 
and  difficulties.  Whether  the  State  or  one  large  joint- 
stock  concern  owned  the  railways  would  be  immaterial 
from  this  point  of  view;  the  essential  conditions  are  that 
there  should  be  single  ownership  and  single  management. 

Sir  Eric  Geddes  announced  on  March  17,  191 9,  that  the 
British  railway  system  would  be  electrified  as  soon  as  pos¬ 
sible.  The  electrification  of  the  lines  should  lead  to  an 
enormous  economy  in  coal,  and  especially  in  labour.  How¬ 
ever,  it  must  not  be  expected  that  electrification  alone  will 
solve  the  difficulties  of  the  British  railway  problem,  for 
other  nations  also  may  electrify  their  railways,  and  they 
may  be  able  to  obtain  electric  power  more  cheaply  than 
the  United  Kingdom  from  waterfalls.  Unfortunately,  the 
United  Kingdom  has  practically  no  waterfalls,  while 
millions  of  horse-powers  may  be  derived  from  waterfalls 
in  France,  Switzerland,  Italy,  Sweden,  and  Norway,  and 
particularly  from  the  gigantic  falls  in  the  United  States 
and  in  Canada.  The  United  States  intend  electrifying  not 


466  BRITISH  RAILWAYS,  CANALS,  AND  ROADS 


only  their  railways,  but  also  their  factories,  as  far  as  pos¬ 
sible.  Great  Britain  would  therefore  still  be  behindhand 
in  economic  railway  transportation  unless  the  railway 
system  is  unified  and  unless  the  railways  are  run  for  the 
benefit  of  the  nation,  and  especially  its  industries,  instead 
of  being  run  for  the  advantage,  or  the  supposed  advantage, 
of  shareholders,  share-pushers,  promoters,  financiers, 
lawyers,  and  other  hangers-on.  Heavier  rails  will  have 
to  be  laid,  the  permanent  way  will  have  to  be  improved, 
tunnels  will  have  to  be  widened,  bridges  must  be  strength¬ 
ened,  docks  and  warehouses  have  to  be  improved,  uni¬ 
formity  of  locomotives  and  of  rolling  stock  must  be  created 
as  far  as  possible,  a  uniform  system  of  book-keeping  and 
accounting  must  be  provided,  the  best  experts  must  replace 
the  aged  railway  directors.  The  modernisation  of  the 
British  railway  system  will  take  time  and  will  cost  vast 
amounts  of  money,  for  the  neglect  of  decades  must  be 
made  up  for.  A  gigantic  expenditure  is  necessary,  but 
that  expenditure  should  bear  fruit,  and  should  place 
British  industry  and  trade  on  an  entirely  new  basis. 

The  great  Lord  Bacon  wrote:  “  There  are  three  things 
which  make  a  nation  great  and  prosperous:  a  fertile  soil, 
busy  workshops,  and  easy  conveyance  for  men  and  com¬ 
modities  from  one  place  to  another.”  Waterways  are  of 
considerable  importance  for  the  inland  transport  of  freight. 
In  certain  cases  transport  by  water  is  preferable  to  trans¬ 
port  by  rail. 

One  of  the  greatest  advantages  of  transport  by  water 
lies  in  this,  that  a  given  amount  of  power  is  far  more  effec¬ 
tive  in  hauling  a  load  by  water  than  in  hauling  it  on 
land.  A  horse  can  haul  on  a  level  road  and  at  a  speed  of 
three  miles  per  hour  about  2  tons.  On  a  level  railroad  it 
can  pull  about  1 5  tons.  On  a  canal  it  can  pull  from  60  to 
1 00  tons.  In  other  words,  transport  by  canal  involves  an 
enormous  saving  of  power,  which  means  an  enormous 


BRITISH  RAILWAYS,  CANALS,  AND  ROADS  467 


saving  of  coal,  or  whatever  the  means  of  propulsion 
may  be. 

There  are  further  advantages  in  using  waterways  for 
inland  transport-  The  cost  of  barges  and  boats  per  ton  of 
load-room  is  far  smaller  than  the  cost  of  railway  trucks. 
It  costs  roughly  five  times  as  much  to  construct  1,000  tons 
of  railway  load-room  as  1,000  tons  of  barge  load-room, 
while  repairs  and  upkeep  are  approximately  equal  for 
barges  and  trucks. 

The  construction  of  canals  through  level  country  is,  as 
a  rule,  no  dearer  than  the  construction  of  a  railway  line 
of  equal  length.  Moreover,  a  canal  mile  can  carry  a  far 
larger  quantity  of  traffic  than  a  railway  mile. 

In  view  of  the  fact  that  the  construction  of  canals  is  no 
dearer  than  the  construction  of  railways,  provided  the 
ground  is  favourable,  and  that  canals  can  carry  a  larger 
quantity  of  freight  per  mile  at  lower  cost,  it  is  obvious  that 
canal  transport  offers  very  great  advantages  over  trans¬ 
port  by  railroad.  That  was  clearly  recognised  in  Germany. 
In  that  country  the  State  possessed  practically  all  the  rail¬ 
ways.  Nevertheless,  it  diminished  its  profitable  mono¬ 
poly  by  furthering  the  construction  of  canals  with  the 
greatest  energy.  The  result  of  this  policy  was  extremely 
favourable  to  the  German  industries.  In  Germany  coal 
and  iron  are  separated  by  enormous  distances.  The  iron 
ore  of  Alsace-Lorraine  was  smelted  chiefly  in  the  West¬ 
phalian  district  about  Essen  and  Dortmund.  The  develop¬ 
ment  of  the  great  German  iron  and  steel  industry  would 
have  been  impossible  had  coal  and  iron  been  forced  to 
rely  on  transport  by  rail.  Freight  charges  by  railway 
were  in  Germany  exceedingly  low  before  the  War,  but  they 
were  about  twice  as  high  as  the  corresponding  charges  by 
waterway. 

In  transportation  by  waterway,  as  in  transportation  by 
land,  the  greatest  cheapness  is  effected  if  goods  are  moved 


468  BRITISH  RAILWAYS,  CANALS,  AND  ROADS 


in  large  quantities.  Transport  by  large  ships  and  barges 
is  far  more  economical  than  by  small  and  medium  sized 
ones.  Hence  the  Germans  constructed  very  deep  and 
broad  canals  on  which  ships  and  barges  of  great  holding 
capacity  could  be  employed.  Between  1887  and  1912  the 
number  of  ships  and  barges  of  less  than  100  tons  used  by 
the  inland  waterways  of  Germany  increased  from  11,281 
to  11,843.  They  remained  stationary.  During  the  same 
period  ships  and  barges  able  to  carry  from  250  to  600  tons 
increased  from  1,271  to  6,027,  or  fivefold,  and  ships  and 
boats  able  to  carry  more  than  600  tons  increased  from  220 
to  3,073,  or  practically  fifteenfold.  On  the  Rhine  ships 
and  barges  of  a  loading  capacity  of  2,000  tons  and  more 
can  be  seen  every  day.  Frequently  a  single  tug  hauls  a 
string  of  these  gigantic  barges.  Thus  a  single  engineer 
can  move  up  or  down  river  10,000  tons  of  goods,  while  on 
British  canals  toy  barges  of  30,  40,  or  50  tons,  hauled  by 
horses,  are  frequently  seen.  British  barges  able  to  trans¬ 
port  100  tons  or  more  are  rare. 

The  importance  of  the  German  canal  and  river  system 
for  inland  transport  may  be  seen  by  the  little-known  fact 
that  before  the  War  the  German  inland  fleet  was  actually 
larger  than  the  German  merchant  marine.  According  to 
the  official  statistics,  the  tonnage  of  the  German  inland 
fleet  increased  from  1,658,266  tons  in  1882  to  7,394,567 
tons  in  1912.  During  thirty  years  it  had  increased  more 
than  fourfold.  The  German  merchant  marine  had  in  1 912 
a  tonnage  of  4,711,998  gross  and  of  3,023,725  net. 

Of  course,  transport  by  inland  waterway  is  compara¬ 
tively  slow.  It  is  therefore  particularly  useful  for  those 
goods  which  are  of  little  value,  which  must  be  transported 
cheaply,  and  in  respect  of  which  rapidity  of  conveyance  is 
of  little  account.  In  Germany  and  in  other  countries  in 
which  inland  water  transport  is  highly  developed,  the 
canals  and  rivers  are  chiefly  employed  for  the  carriage 


BRITISH  RAILWAYS,  CANALS,  AND  ROADS  469 


of  ore,  stone,  sand,  timber,  coal,  grain,  petroleum,  hides, 
cement,  bricks,  manure,  and  so  forth. 

From  a  national  point  of  view  the  advantage  of  an  effi¬ 
cient  canal  system  is  a  twofold  one.  In  the  first  place  it 
makes  possible  cheap  carriage  for  those  goods  for  which 
cheap  carriage  is  essential.  In  the  second  place  it  eases 
very  greatly  the  position  of  the  railways,  which  otherwise 
would  be  encumbered  by  vast  quantities  of  bulky  material 
which  block  the  permanent  way. 

A  century  ago  England  had  the  finest  and  the  most 
highly  developed  canal  system  in  the  world.  Its  canals 
were  the  envy  of  all  other  nations.  The  railway  era  began. 
The  railway  promoters  and  managers  wished  to  secure  the 
monopoly  of  inland  transport,  and  they  began  a  campaign 
of  canal  destruction,  which  unfortunately  was  permitted 
by  Parliament.  The  prosperity  and  efficiency  of  the 
British  canal  system  was  destroyed  by  the  railways.  In 
some  cases  the  canals  were  made  unprofitable  by  deliberate 
cut-throat  competition.  In  other  cases  the  railways  ac¬ 
quired  vital  links  of  the  canals  and  allowed  these  to  fall 
into  decay.  Numerous  canals  were  “repaired”  out  of 
existence.  Others  were  blocked  for  traffic  by  the  con¬ 
struction  of  low  bridges  or  of  railway  embankments  and 
lines.  Sir  Maurice  Fitzmaurice,  the  Chairman  of  the  Canal 
Control  Committee,  stated  on  October  8,  1918,  before  the 
Select  Committee  on  Transport : 

The  Report  of  the  Royal  Commission  on  Canals  issued 
in  19u9  fully  went  into  the  reasons  which,  with  few  excep¬ 
tions,  have  brought  the  waterways  in  this  country  into  the 
deplorable  state  in  which  they  exist  at  the  present  time. 
The  Report  stated  that  “these  waterways  have  suffered 
through  long  neglect  and  errors  in  legislation.”  It  must 
be  remembered  that  canals  were  at  one  time  very  pros¬ 
perous,  but,  generally  speaking,  the  construction  of  rail¬ 
ways  deprived  the  canals  of  much  of  their  traffic  and 
revenue.  After  the  general  prosperity  of  canals  came  to 

n 


470  BRITISH  RAILWAYS,  CANALS,  AND  ROADS 


an  end  it  was  difficult  to  obtain  money  for  improvement 
of  canals,  and  consequently,  with  one  or  two  exceptions, 
the  canals  are  very  much  in  the  same  condition  as  they 
were  eighty  years  ago. 

The  total  mileage  of  the  important  waterways  in  the 
country  is  2,500  miles,  of  which  1,226  miles  are  under  the 
control  of  the  Canal  Control  Committee.  A  large  number 
of  these  navigations  are  comparatively  short  lengths,  such 
as  the  Birmingham  and  W  arwick  Junction  Canal,  under 
3  miles;  Loughborough  Navigation,  under  10  miles; 
WTarwick  and  Napton  Canal,  under  15  miles;  Regent’s 
Canal,  under  11  miles.  For  the  1,226  miles  under  the 
Canal  Control  Committee  there  are  twenty-six  canal  com¬ 
panies.  It  is  obvious,  when  the  canal  mileage  is  split  up 
into  a  number  of  small  companies,  it  is  impossible  for  them 
to  be  economically  managed,  or  for  them  to  work  satisfac¬ 
torily.  Such  small  companies  cannot,  of  course,  afford  to 
pay  men  with  sufficient  qualifications  to  look  after  the 
navigation,  and  they  are,  as  a  general  rule,  neglected. 

If  goods  go  from  the  Thames  to  Birmingham  by  canal, 
they  pass  over  the  Grand  Junction  Canal,  Oxford  Canal, 
W  arwick  and  Napton  Canal,  Warwick  and  Birmingham 
Canal,  and  the  Birmingham  and  W  arwick  J unction  Canal, 
finally  arriving  on  the  Birmingham  Canal.  If  goods  go 
from  Liverpool  via  Manchester  to  the  Humber,  they  pass 
through  the  Bridgewater  Canal,  Rochdale  Canal,  Calder 
and  Hebble  Navigation,  and  the  Aire  and  Calder  Naviga¬ 
tion.  The  Royal  Commission  recognised  that  the  present 
system  of  small  canal  companies  was  impossible  if  canal 
traffic  in  this  country  v  ere  developed. 

Obviously  the  British  canal  system  wants  reorganisation 
if  it  is  to  be  made  once  more  efficient. 

Although  the  British  canals  and  waterways  may  be 
immensely  improved,  it  cannot  be  expected  that  they  will 
ever  be  able  to  compare  in  efficiency  with  those  of  the  great 
Continental  countries,  such  as  Germany.  Germany  has 
become  the  foremost  European  country  as  regards  inland 
water  transport  not  only  owing  to  the  energy  and  fore¬ 
sight  of  the  Government,  which  has  spent  many  millions 


BRITISH  RAILWAYS,  CANALS,  AND  ROADS  471 

on  the  regulation  of  rivers  and  the  construction  of  canals, 
but  also,  and  chiefly,  owing  to  the  natural  conditions  of 
the  country.  The  whole  of  North  Germany  is  a  gigantic 
plain.  One  can  travel  from  Cologne  on  the  Rhine  to  the 
Russian  frontier  by  railway  without  passing  through  a 
single  tunnel.  Moreover,  the  gigantic  North  German 
plain  possesses  a  number  of  gently  flowing  wide  and  deep 
rivers  which  follow  a  parallel  course,  and  which  invite 
connection  by  canals.  The  natural  conditions  are  there¬ 
fore  obviously  totally  different  in  the  two  countries.  The 
United  Kingdom  has  no  large  plains  and  has  no  large 
rivers.  Natural  waterways  which  can  be  used  by  shipping 
without  constructing  locks  are  lacking,  and  water  itself  is 
rather  scarce.  Sir  Maurice  Fitzmaurice  correctly  stated 
in  his  evidence : 

If  you  take  a  canal  from  here  to  Birmingham,  you  have 
a  lock  about  every  mile,  and  there  is  just  as  much  time 
spent  at  those  locks  as  there  is  in  carrying  the  stuff  between 
them,  or  very  nearly  as  much;  and  sometimes,  if  you  are 
going  into  the  Birmingham  district,  a  great  deal  more  time 
is  spent  at  the  locks  than  in  carrying  the  stuff  between  the 
locks.  Until  you  can  increase  the  speed  at  which  the 
stuff  is  carried  by  canal  I  do  not  think  you  will  do  very 
much  good.  To  increase  the  speed  you  must  have  fewer 
locks,  and  you  must  have  boats  with  some  kind  of  mechani¬ 
cal  propulsion,  either  steam,  petrol,  or  oil  driven  boats. 
The  moment  you  get  beyond  a  speed  of  three  miles  an  hour 
you  have  to  renew  the  banks  of  your  canals  and  revet 
them  with  stone,  because  otherwise  they  will  not  stand  the 
wave.  Then,  as  regards  the  locks,  I  am  quite  satisfied  in 
my  own  mind  that  if  you  could  make  a  fresh  start  with  the 
present  canals  nobody  would  put  locks  at  every  mile. 
Instead  of  having  locks  at  every  mile  you  would  try  to 
contour  the  canal  a  bit  more,  until,  instead  of  having  a 
lift  of  6  feet  at  a  lock,  you  get  to  a  lift  of,  say,  30  feet,  and 
then  I  should  do  away  with  the  lock  and  have  a  lift,  and 
save  a  very  great  deal  of  time.  It  is  very  easy  for  me  to 
talk  about  that,  but  it  is  very  difficult  to  form  the  least 


472  BRITISH  RAILWAYS,  CANALS,  AND  ROADS 

estimate  in  my  mind  of  what  improvements  of  that  kind 
would  cost — I  could  not  possibly  do  it — but  that  would 
be  the  line  upon  which  I  think  it  ought  to  go.  .  .  . 

Take  the  Oxford  Canal,  or  even  the  Grand  Junction 
Canal.  The  dredging  in  those  canals  is  a  perfect  dis¬ 
grace.  I  have  had  cross-sections  made  of  the  Oxford 
Canal  at  the  present  time  all  through,  and  it  is  really  a 
matter  of  the  greatest  difficulty  for  boats  to  go  along  it, 
the  dredging  is  so  behindhand.  They  tell  me  that  the  life 
of  the  bottom  of  a  boat  on  the  Oxford  Canal  is  very  short 
indeed,  because  it  is  principally  scraping  along  the  bottom. 

The  British  canal  system  has  suffered  not  only  from 
official  neglect,  from  the  hostility  of  the  railways,  and  from 
the  fact  that  it  has  never  been  organised  on  large  national 
lines,  but  also  from  mismanagement.  When  the  railway 
era  began  the  canals  ought  to  have  amalgamated,  and 
everything  ought  to  have  been  done  to  increase  their 
efficiency.  Instead  of  this,  many  canal  companies  and 
canal  owners  considered  the  position  of  their  properties 
hopeless,  and  neglected  them.  One  of  the  most  efficient 
British  canals  is  the  Aire  and  Calder  Canal.  Transporta¬ 
tion  along  that  canal  is  so  cheap  that  the  railways  cannot 
compete  with  it.  With  regard  to  that  canal,  Sir  Maurice 
Fitzmaurice  stated  in  his  evidence : 

In  the  case  of  a  canal  such  as  the  Aire  and  Calder,  the 
service  is  probably  one  of  the  most  efficient  in  the  world, 
and  the  carriage  of  coal  is  effected  on  such  conditions  that 
railways  cannot  compete  with  it.  .  .  . 

One  very  peculiar  advantage  of  the  canal  was  that  they 
possessed  a  man  named  Mr.  Bartholomew,  who  practi¬ 
cally  ran  the  canal  company  for  a  long  time,  and  made  it 
what  it  was.  He  is  still  alive,  but  is  now  not  able  to  do 
anything.  He  was  a  very  far-seeing  man,  and  made  them, 
instead  of  paying  dividends,  put  their  money  into  the 
property.  They  paid  moderate  dividends,  but  all  the  time 
they  kept  putting  money  into  the  property.  It  is  a  canal 
which  goes  through  a  peculiar  district  which  is  rich  in  coal, 


BRITISH  RAILWAYS,  CANALS,  AND  ROADS  473 

and  it  goes  up  to  a  very  large  city,  Leeds,  so  they  have 
every  advantage,  together  with  the  port  of  Goole,  from 
whence  they  go  straight  down  to  Hull.  They  do  a  lot  of 
shipping  at  Goole. 

The  United  Kingdom  can  never  hope  to  create  a  system 
of  waterways  and  canals  similar  to  that  possessed  by 
Germany.  At  the  same  time,  the  existing  canals  and 
waterways  can  be  vastly  improved,  to  the  very  great  ad¬ 
vantage  of  trade  and  industry  and  of  the  railways  them¬ 
selves,  for  they  will  relieve  their  congestion.  Of  course, 
it  will  be  a  very  expensive  matter  to  make  up  for  the  neg¬ 
lect  of  decades.  The  railways,  the  traders,  and  the  general 
public,  will  have  to  be  educated  how  to  use  the  canals. 
However,  the  re-creation  of  the  canal  system  is  not  a  wild 
speculation,  for  the  cost  of  its  reconstruction  and  of  trans¬ 
port  is  calculable. 

Those  who  deplore  the  congestion  of  the  British  railways 
and  their  exorbitant  freight  charges  have  often  recom¬ 
mended  that  an  alternative  and  competitive  transport 
system  should  be  created  by  making  fuller  use  of  the  roads. 
The  idea  that  the  British  transport  problem  can  be  solved 
by  putting  powerful  automobiles  on  the  roads  is  probably 
vain.  The  wear  and  tear  of  tyres  and  of  the  machinery, 
and  of  the  roads  themselves,  would  probably  be  so  enor¬ 
mous  that  heavy  traffic  could  not  be  handled  by  them  in 
competition  with  the  railways.  Moreover,  the  British 
roads,  unlike  the  French  and  German  roads,  are  not  wide 
and  straight,  and  therefore  easily  usable  for  heavy  traffic, 
but  are,  as  a  rule,  narrow  and  full  of  curves.  The  recon¬ 
struction  of  the  road  system,  so  as  to  make  it  usable  for 
heavy  traffic,  would  probably  be  more  costly  even  than  the 
reconstruction  of  the  British  canals  and  waterways. 

Although  the  roads  will  scarcely  be  able  to  compete 
successfully  with  the  railways  in  handling  heavy  traffic, 
especially  if  the  mechanical  outfit  of  the  railways  should 


474  BRITISH  RAILWAYS,  CANALS,  AND  ROADS 


be  greatly  improved,  they  may  contribute  considerably  to 
the  solution  of  the  traffic  difficulties.  In  the  first  place,  a 
well- organised  service  of  road  vehicles  will  act  as  an  in¬ 
valuable  feeder  to  the  principal  means  of  transport.  In 
the  second  place,  light  railways  may  here  and  there  be 
constructed  along  the  roadways,  similar  to  those  which 
may  be  found  on  the  Continent  and  to  those  which  the 
British  Army  has  constructed  in  France. 

Recently  proposals  have  been  made  to  empty  the  canals 
and  to  convert  them  into  roads  and  railroads.  That  is, 
of  course,  quite  impracticable.  One  cannot  run  traffic 
through  dry  ditches,  which  in  case  of  rain  would  be  con¬ 
verted  once  more  into  rivers  and  canals. 

Those  who  have  the  improvement  of  the  inland  trans¬ 
port  system  at  heart  should  endeavour  to  develop  all  the 
national  means  of  communication  simultaneously  and 
harmoniously.  The  United  Kingdom  is  most  favourably 
situated  for  transport  purposes.  It  is  deeply  intersected 
by  the  sea.  The  inland  portions  of  the  country  can  easily 
be  reached  from  the  shore.  By  the  harmonious  develop¬ 
ment  of  railways,  canals,  road  traffic,  and  coastal  shipping, 
it  should  be  possible  to  create  for  the  United  Kingdom  and 
its  industries  transport  conditions  which  will  favourably 
compare  with  those  possessed  by  any  other  country. 


CHAPTER  XX 


THE  BRITISH  MERCHANT  MARINE  AND 
THE  EMPIRE:  SHOULD  THE  EMPIRE  TRADE  BE 
RESERVED  TO  EMPIRE  SHIPPING  ? 

The  British  Empire  is  scattered  all  over  the  globe.  It 
occupies  a  peculiar  and  a  unique  position.  Alone  among 
the  States  of  the  world  it  is  a  Sea  Empire.  Not  land 
routes,  but  the  seas,  connect  the  outlying  portions  and  the 
Motherland. 

The  sea  routes  are  the  arteries  of  the  Empire.  They 
furnish  the  life-blood  to  the  different  parts.  It  is  as  neces¬ 
sary  for  the  British  Empire  to  dominate  the  sea  routes 
which  connect  London  and  Liverpool  with  Montreal, 
Sydney,  Cape  Town,  Bombay,  etc.,  as  it  is  necessary  for 
the  United  States  to  dominate  the  railways  which  connect 
New  York  with  Chicago  and  San  Francisco.  The  Power 
which  rules  the  sea  holds  in  its  hands  the  fate  of  the  British 
Empire  and  of  its  inhabitants,  exactly  as  the  Power  which 
dominates  the  great  railways  of  the  United  States  controls 
the  fate  of  that  country. 

The  United  Kingdom  depends  for  its  indispensable  food 
and  raw  materials  on  imports  by  sea.  The  domination  of 
the  seas  by  a  foreign  Power,  or  by  a  combination  of  foreign 
Powers,  would  jeopardise  not  only  the  continued  existence 
of  the  British  Empire,  but  would  threaten  the  life  of  the 
densely  populated  Motherland  as  well.  The  peculiar  and 
unique  position  of  the  British  Empire  requires  the  main¬ 
tenance  of  its  naval  and  maritime  supremacy.  Its  polit¬ 
ical  and  economic  security  requires  the  possession  of  a 

475 


476  BRITISH  SHIPPING  AND  THE  EMPIRE 


predominant  fleet  and  of  a  predominant  merchant  marine. 
The  Final  Report  of  the  Board  of  Trade  Committee  on 
Shipping  and  Shipbuilding  expressly  and  emphatically 
stated  in  paragraph  5:  “  The  maritime  ascendancy  of  the 
Empire  must  be  maintained  at  all  costs.” 

Voices  in  England  and  abroad  have  arisen  demanding 
that  the  great  settlement  of  the  War  should  bring  about 
“  the  freedom  of  the  seas.”  That  phrase  is  a  vague  one, 
and  it  has  a  history.  The  Roman  land  empire  attacked 
the  Carthaginian  sea  empire  in  order  to  establish  the  free¬ 
dom  of  the  seas,  and  it  subjected  not  only  all  the  then 
known  lands,  but  all  the  seas  as  well,  to  the  military 
despotism  of  Rome.  Napoleon,  when  endeavouring  to 
subject  the  world  to  himself,  asserted  that  he  fought 
England  for  the  benefit  of  all  mankind,  that  he  wished  to 
establish  “  the  freedom  of  the  seas.”  The  same  claim  of 
disinterested  benevolence  was  raised  by  William  II.  and 
his  statesmen,  Generals,  and  publicists.  Germany  also 
made  war  upon  the  world  for  “  the  freedom  of  the  seas.’’ 

The  prosperity — nay,  the  existence — of  the  British 
Empire  requires  that  the  British  people  should  continue  to 
possess  a  predominant  navy  and  a  predominant  merchant 
marine,  for  their  possession  alone  can  ensure  the  political 
and  economic  freedom  of  the  widely  scattered  British 
nation. 

The  problem  which  is  summed  up  in  the  loose  phrase 
“  the  freedom  of  the  seas  ”  has  a  twofold  aspect,  a  military 
one  and  a  civil  one.  The  two  should  not  be  confused,  but 
should  be  considered  separately. 

The  problem  of  the  freedom  of  the  seas  in  time  of  war  is 
a  problem  in  which  the  views  of  the  ablest  naval  com¬ 
manders  and  strategists  should  be  authoritative.  The 
problem  of  the  freedom  of  the  seas  in  time  of  peace  is  a 
problem  in  which  the  views  of  business  men,  and  especially 
of  those  of  the  shipping  community,  should  have  peculiar 


BRITISH  SHIPPING  AND  THE  EMPIRE  477 


weight.  The  latter  only  will  be  considered  in  the  following 
pages. 

Before  the  War  the  United  Kingdom  followed  the  policy 
of  freedom  of  trade  and  of  freedom  of  navigation,  while 
other  nations  endeavoured  to  protect  and  foster  both  their 
trade  and  their  shipping  in  various  ways.  For  decades 
British  statesmen  had  voiced  the  views  of  British  ship¬ 
owners  in  demanding  absolute  freedom  for  their  shipping, 
absolute  equality  in  the  treatment  of  ships  in  all  countries 
and  in  all  ports,  the  abolition  of  all  artificial  encourage¬ 
ments  and  restrictions  which  entrench  upon  the  freedom 
of  navigation.  In  the  past  Great  Britain  and  the  British 
Empire  have  flung  their  gates  wide  open  to  all  comers, 
have  invited  all,  and  have  treated  all  nations  alike,  but  that 
policy  has  not  been  reciprocated.  Will  the  nations  of  the 
world  meet  the  desire  of  Great  Britain  and  of  the  Empire 
and  abolish  their  policy  of  artificially  fostering  their  own 
merchant  marine,  to  their  own  disadvantage  and  to  the 
advantage  of  Great  Britain  ? 

The  navigation  policy  of  the  utmost  liberality  and 
generosity  which  Great  Britain  pursued  previous  to  the 
W&r  did  not  meet  with  any  reciprocity.  On  the  contrary, 
the  nations  of  the  world  proceeded  to  limit  from  year  to 
year  more  severely  the  field  left  to  the  British  merchant 
marine.  While  the  United  Kingdom  followed  the  tradi¬ 
tional  policy  of  free  navigation  and  no  favour  on  the  sea, 
which  is  dear  to  its  shipowners,  other  nations  also  followed 
a  traditional  policy  which  is  equally  dear  to  them  and 
which  is  absolutely  opposed  to  the  British  policy.  Un¬ 
fortunately  there  is  no  indication  that  they  intend  to 
abandon  it.  On  the  contrary. 

The  War  has  opened  a  new  chapter  in  the  world’s  history. 
The  traditional  navigation  policy  of  Great  Britain  was 
based  on  pre-war  conditions.  British  economic  policy 
should  be  based,  not  on  economic  theory  and  on  the  prac- 


478  BRITISH  SHIPPING  AND  THE  EMPIRE 


tice  of  the  past,  but  on  the  practical  requirements  of  the 
present  and  of  the  future.  British  navigation  policy 
should  be  in  accordance  with  practical  facts,  and  should 
change  in  accordance  with  changing  conditions.  Now,  it 
must  be  clear  to  all  who  have  eyes  to  see  that  navigation 
conditions  have  rapidly  been  changing  to  Great  Britain’s 
disadvantage  previous  to  the  War  and  during  the  War,  and 
that  they  are  likely  to  continue  changing  to  the  disadvan¬ 
tage  of  British  shipping  after  the  War. 

Before  the  War  Great  Britain’s  pre-eminent  position 
both  as  a  shipowner  and  as  a  shipbuilder  was  fast  declining. 
The  Report  of  the  Committee  of  the  Chamber  of  Shipping 
of  the  United  Kingdom  and  of  the  Liverpool  Shipowners’ 
Association  gave  on  p .  82  the  following  figures : 


Percentage  of  Steam  Tonnage. 


1904. 

1911. 

Per  Cent. 

Per  Cent. 

United  Kingdom 

. .  . .  . .  52*03 

47-79 

British  Dominions 

and  Possessions  . .  4-01 

4-29 

1 

56-04 

52-08 

Foreign  countries 

. .  . .  . .  43-96 

47-92. 

100-00 

100-00 

With  regard  to  shipbuilding,  the  Second  Report  of  the 
Board  of  Trade  Departmental  Committee  on  Shipping 
and  Shipbuilding  provided  the  following  statistics  in  para- 
.  graph  10 : 


Proportion  of  British  Output  of  Shipping  to  World’s 


1892-94 

1895-99 

1900-04 

1905-09 

1910-14 


Output. 


Per  Cent. 
81-6 
72-8 
59-9 
61-0 
61*9 


BRITISH  SHIPPING  AND  THE  EMPIRE  479 


Between  1904  and  1911  the  proportion  of  British  ship¬ 
ping  decreased  from  56*04  per  cent,  to  52*08  per  cent., 
while  the  proportion  of  foreign  shipping  increased  from 
43*96  per  cent,  to  47*92  per  cent.  Between  the  periods 
1892-94  and  1910-14  the  proportion  of  British  shipbuilding 
to  the  world’s  shipbuilding  decreased  from  81*6  per  cent, 
to  61*9  per  cent.,  while  that  of  foreign  nations  increased 
from  18*4  per  cent,  to  38*1  per  cent.  These  figures  are 
ominous.  They  clearly  show  that  before  the  War  Great 
Britain  was  rapidly  losing  to  foreign  nations  her  pre¬ 
eminence  both  as  a  shipowner  and  as  a  shipbuilder.  The 
tendency  is  unmistakable  and  indisputable,  and  should 
serve  as  a  warning. 

Before  the  War  the  British  Empire  possessed  approxi¬ 
mately  50  per  cent,  of  the  world’s  shipping,  of  which  the 
bulk  was  domiciled  and  managed  in  the  United  Kingdom. 
At  first  sight  it  would  seem  that  the  British  people  pos¬ 
sessed  an  undue  proportion  of  the  world’s  shipping,  that 
foreign  nations  had  some  justification  for  complaining 
about  England’s  maritime  predominance.  However,  if  we 
look  a  little  closer,  we  find  that  there  was  considerable 
justification  for  England’s  pre-eminence  on  the  sea.  Ex¬ 
amination  of  the  statistics  of  the  world’s  foreign  trade  will 
reveal  the  fact  that  the  percentage  of  the  Empire  shipping 
stood  before  the  War  in  extraordinarily  close  relation  with 
the  proportion  which  the  British  Imperial  trade  bore  to 
the  foreign  trade  of  the  whole  world. 

Before  the  War  the  British  Empire  contributed  approxi¬ 
mately  50  per  cent,  to  the  world’s  tonnage.  It  is  true  that 
a  considerable  proportion  of  British  tonnage  was  employed 
in  purely  foreign  trade.  However,  as  an  offset  there  was 
a  not  unsimilar  percentage  of  British  trade  which  was 
carried  in  foreign  vessels. 

If,  through  a  change  in  England’s  navigation  policy, 
British  shipping  should  lose  a  considerable  portion  of  the 


480  BRITISH  SHIPPING  AND  THE  EMPIRE 


foreign  trade  which  it  has  carried  hitherto,  that  loss  would 
probably  be  offset  more  or  less  exactly  by  the  acquisition 
of  that  part  of  the  British  Empire  trade  which  was  carried 
by  foreign  nations. 

In  the  course  of  the  War  the  British  mercantile  marine 
has  been  very  seriously  weakened  and  reduced.  During 
the  same  time  the  merchant  marines  of  some  of  the  neutral 
States  and  of  those  belligerents  which  were  less  exposed  to 
attacks  by  submarines  have  been  vastly  strengthened. 
Thus  the  pre-eminence  of  the  British  merchant  marine  has 
been  very  materially  diminished  and  foreign  competition 
has  become  more  severe,  and  it  is  likely  to  be  greatly 
accentuated  in  the  future.  That  is  admitted  by  all 
competent  observers.  The  Final  Report  of  the  Board  of 
Trade  Committee  stated  in  paragraphs  66  and  67 : 

In  the  case  of  certain  foreign  countries  anxious  to 
develop  their  merchant  marine  the  evils  of  the  tonnage 
situation  have  not  been  unmixed.  Neutral  shipowners 
who  have  not  been  subject  to  the  restrictions  imposed  on 
British  shipowners  have  been  able  to  amass  large  profits 
which  will  enable  them  to  engage  in  severe  competition 
with  the  latter  after  the  War.  There  has  been  great  ship¬ 
building  activity  in  foreign  countries,  notably  in  the 
United  States,  Japan,  and  Holland.  Japanese  encroach¬ 
ment  in  our  Eastern  trades  is  already  serious,  and  will 
become  more  serious. 

Competition  of  the  most  formidable  character  is  to  be 
anticipated  from,  the  United  States,  where  marine  enter¬ 
prise  has  received  a  great  stimulus  during  the  War  from 
the  acute  tonnage  stringency  prevalent  throughout  the 
world,  and  from  orders  on  a  large  scale  placed  in  American 
yards  by  foreign  countries,  and  not  least  by  this  country. 

The  result  of  the  factors  described  above  will  be  that  the 
lead  of  this  country  in  the  world’s  carrying  trade  will,  by 
the  end  of  the  War,  have  been  diminished,  if  not  lost;  and 
unless  British  shipping  is  enabled  at  the  outset  of  the 
Reconstruction  period  to  take  full  advantage  of  the  new 
situation,  it  may  fall  behind  in  the  competitive  race,  and 


BRITISH  SHIPPING  AND  THE  EMPIRE  481 


definitely  lose  the  ascendancy  which  has  been  the  key¬ 
stone  of  the  Empire  and  a  condition  of  our  industrial 
existence. 

With  regard  to  the  future  position  of  British  shipbuild¬ 
ing,  the  Second  Report  stated  in  paragraph  20 : 

Competition  with  the  British  shipbuilding  industry  from 
many  foreign  countries  will  be  materially  increased.  This 
war  has  shown  foreign  nations  the  advantages  of  a  national 
mercantile  marine,  and  the  value  of  encouraging  national 
shipbuilding  facilities.  Much  new  shipbuilding  plant  has 
been  put  down,  and  the  experience  which  is  being  obtained 
by  foreign  countries  during  the  War  is  likely  to  enable  them 
to  compete  more  nearly  on  even  terms  with  British  ship¬ 
builders.  There  is  strong  reason  to  believe  that  ship¬ 
builders  in  the  United  States  will  be  able  to  obtain  iron 
and  steel  materials  as  cheaply  as  British  firms,  if  not  more 
cheaply,  and  that  consequently  competition  will  become 
severe. 

Of  the  two  Reports  quoted,  the  Final  Report  was  signed 
in  March,  1918,  and  the  Second  Report  in  July,  1917. 
Since  these  dates  the  position,  both  for  British  shipping 
and  for  British  shipbuilding,  has  become  materially  worse. 

Those  who  assert  that  the  British  merchant  marine  has 
become  supreme  under  the  policy  of  freedom  of  trade  and 
of  navigation,  and  owing  to  that  policy,  are  mistaken.  In 
the  first  half  of  the  seventeenth  century  the  Dutch  were  the 
world’s  shippers  and  carriers.  A  large  part  of  England’s 
foreign  trade  was  carried  in  Dutch  bottoms.  The  mari¬ 
time  pre-eminence  of  Holland  was  destroyed,  and  that  of 
England  was  established,  by  Oliver  Cromwell  by  means  of 
his  Navigation  Acts,  and  the  wisdom  of  these  Acts  was 
unhesitatingly  acknowledged  and  praised  by  the  father  of 
Free  Trade,  Adam  Smith,  in  his  Wealth  of  Nations. 

In  the  first  half  of  the  nineteenth  century,  during  the 
era  of  wooden  ships,  the  United  States  rapidly  encroached 
upon  England's  supremacy  as  a  shipowner  and  a  ship- 


482  BRITISH  SHIPPING  AND  THE  EMPIRE 


builder  largely  because  America  was  more  advantageously 
situated  for  the  supply  of  timber,  etc.  In  1858-61  the 
United  States  had  drawn  practically  level  with  England 
in  shipbuilding.  Now  that  country  is  more  advantage¬ 
ously  situated  for  providing  steel. 

When  the  era  of  the  iron  steamship  opened,  England  was 
by  far  the  greatest  manufacturing  country  in  the  world. 
She  produced  more  iron  and  more  machinery  than  all  other 
countries  combined.  The  supremacy  of  England’s  ship¬ 
ping  was  largely  due,  not  to  Free  Trade,  but  to  her  former 
supremacy  in  the  making  of  iron  and  steel  and  in  the  foreign 
trade.  The  Final  Board  of  Trade  Report  stated  in  para¬ 
graph  122: 

The  modern  position  of  the  United  Kingdom  as  the 
great  ship  owning  and  shipbuilding  country  of  the  world 
dates  from  the  substitution  of  steam  for  sailing  power,  and 
of  iron  and  steel  for  wood.  In  1 850,  when  then  there  were 
still  few  steamers,  the  total  mercantile  tonnage  of  the 
Empire  amounted  to  rather  more  than  4,000,000  tons  net, 
and  that  of  the  United  States,  including  only  vessels  reg¬ 
istered  for  the  foreign  trade,  to  as  much  as  1,500,000  tons. 
Fifty  years  later  the  tonnage  of  the  Empire  had  grown  to 
over  10,500,000  tons  net,  whilst  that  of  the  United  States 
had  declined  to  less  than  1,000,000  tons.  Similar  tenden¬ 
cies  were  apparent  in  the  shipbuilding  of  the  two  countries. 
For,  once  the  discoveries  of  the  industrial  revolution  were 
applied  to  the  instruments  of  sea  transport,  the  resources 
of  the  United  Kingdom  in  coal  and  iron  and  their  prox¬ 
imity  to  good  shipbuilding  sites  furnished  the  means  for  a 
great  expansion,  whilst  the  energies  of  the  United  States 
were  absorbed  in  the  development  of  their  vast  western 
territories. 

During  the  last  decade  or  two  England  has  lost  her 
supremacy  in  the  production  of  steel  and  iron  to  Germany 
and  the  United  States.  Before  the  War  the  United  States 
produced  three  times  as  much  iron  and  steel  and  Germany 


BRITISH  SHIPPING  AND  THE  EMPIRE  483 


twice  as  much  iron  and  steel  as  Great  Britain.  Large 
quantities  of  shipbuilding  materials  were  imported  from 
abroad,  as  may  be  seen  from  the  Second  Board  of  Trade 
Report,  paragraphs  28  to  45.  From  the  same  source  we 
learn  that  large  quantities  of  the  materials  imported, 
especially  from  Germany  and  the  United  States,  were  from 
25  to  50  per  cent,  cheaper  than  the  corresponding  British 
materials.  British  shipbuilding  became  dangerously  de¬ 
pendent  upon  foreign  steel. 

The  prosperity  of  the  British  shipping  industry  and  its 
ability  to  compete  with  other  nations  depend  largely  upon 
the  efficiency  of  the  British  shipbuilding  industry.  The 
United  States  have  shown  that,  notwithstanding  higher 
wages,  they  can  produce  goods  more  cheaply  than  Great 
Britain.  Steel  is  no  dearer  in  the  United  States  than  in 
Great  Britain.  The  methods  whereby  the  United  States 
have  become  supreme  in  the  production  of  motor-cars, 
locomotives,  typewriting  machines,  etc.,  may  be  applied 
also  to  shipbuilding.  That,  at  least,  is  the  opinion  of  many 
eminent  American  experts. 

American  business  men,  American  statesmen,  and  the 
bulk  of  the  American  people,  do  not  wish  England  to  carry 
their  trade.  Like  the  Englishmen  of  Cromwell’s  time, 
they  do  not  wish  to  be  dependent  on  foreign  ships.  They 
wish  to  do  their  own  shipping.  They  seem  determined  to 
make  a  strong  bid  for  supremacy  in  shipbuilding  and 
shipping.  They  have  begun  the  construction  of  a  gigantic 
merchant  marine.  The  Americans  are  an  energetic  and  a 
pertinacious  people,  and  they  will  scarcely  be  turned  from 
their  determination  by  British  representations  and  by 
British  demands  to  abolish  all  those  discriminations  which 
favour  American  shipbuilding  and  the  American  shipping 
trade.  Those  who  believe  that  other  nations  ought  to  be 
quite  satisfied  that  Great  Britain  dominates  the  shipping 
trade  hold  very  insular  views. 


484  BRITISH  SHIPPING  AND  THE  EMPIRE 

While  the  competition  of  the  United  States  is  dangerous 
owing  to  the  extraordinary  power  and  efficiency  of  the 
gigantic  American  iron  and  steel  industry,  and  owing  to 
the  passionate  maritime  ambitions  of  the  American  people, 
the  competition  of  Japan  is  dangerous  owing  to  the  low¬ 
ness  of  Japanese  wages  and  owing  to  the  high  maritime 
ability  of  the  Japanese  people.  Japan  is  as  overpopu¬ 
lated  as  the  United  Kingdom.  Her  policy  of  promoting 
shipbuilding  and  the  expansion  of  her  merchant  marine  by 
heavy  subsidies  and  all  other  means  available  seems  un¬ 
likely  to  be  abandoned  for  a  policy  of  free  trade  and  of  free 
navigation  for  England’s  benefit. 

The  Americans  consider  that  they  ought  to  handle  the 
trade  of  North  and  South  America  which  lies  at  their 
doors.  The  J apanese  are  of  opinion  that  the  trade  of  the 
Ear  East  should  be  their  special  preserve.  Now,  the  trade 
of  the  two  Americas  and  of  the  Far  East  constitutes  the 
most  important  part  of  the  British  shipping  trade.  This 
may  be  seen  from  the  following  figures,  which  are  taken 
from  paragrapn  1 60  of  the  Final  Board  of  Trade  Report  : 


British  Steam  Tonnage  engaged  in  Foreign  Trade. 

Tons  Net, 

North  and  South  America  . .  . .  3,502,000 

East  Indies  and  Japan  . .  . .  2,543,000 

All  other  parts  of  the  world  . .  2,845,000 


Total  . .  8,890,000 


The  Americans  and  the  Japanese  desire  to  encroach  on 
the  two  most  valuable  sections  of  the  British  shipping 
trade.  From  their  point  of  view  their  policy  is  a  logical 
and  a  natural  one.  Before  long  British  maritime  supre¬ 
macy  may  become  seriously  threatened. 

The  firmly  established  policy  not  only  of  the  United 
States  and  of  Japan,  but  of  practically  all  the  non- British 


BRITISH  SHIPPING  AND  THE  EMPIRE  485 


States,  has  been  to  foster  their  merchant  marines  by  vari¬ 
ous  means,  and  particularly  by  reserving  to  their  own  ship¬ 
ping  the  so-called  coasting  trade.  The  Final  Board  of 
Trade  Report  stated  in  paragraph  293 : 

Although  the  coasting  trade  of  the  United  Kingdom  and 
the  trade  between  different  parts  of  the  Empire  were  open 
to  the  flags  of  all  nations,  British  vessels  were  excluded 
from  the  similar  trades  of  the  principal  foreign  countries, 
including  Russia,  France  and  the  French  possessions, 
Holland  and  the  Dutch  possessions,  Spain,  the  United 
States  and  the  American  possessions,  Brazil,  Argentina, 
and  Japan. 

It  seems  improbable  that  all  the  nations  enumerated 
will  abandon  their  firmly  established  navigation  policy, 
throw  open  their  coasting  trade  to  British  shipping,  and 
abolish  the  various  measures  whereby  they  have  endeav¬ 
oured,  and  successfully  endeavoured,  to  build  up  merchant 
marines  of  their  own.  But  even  if  the  direct  fostering  of 
foreign  merchant  marines  should  be  discontinued — an 
event  which  is  very  unlikely — discrimination  against 
British  shipping  might  be  effected  by  indirect  means,  by 
the  manipulation  of  railway  tariffs,  and  by  all  the  other 
expedients  which  Germany  used  before  the  War;  by 
bounties  and  drawbacks  given  by  powerful  combinations, 
such  as  those  which  were  given  by  the  great  German 
kartels;  by  preferential  banking  arrangements;  by  the 
manipulation  of  fuel  prices;  by  different  standards  of 
safety ;  by  the  imposition  of  certain  conditions  as  to  sea¬ 
men’s  wages,  food,  accommodation,  etc. 

As  all  evidence  points  to  the  fact  that  other  nations  are 
determined  to  foster  their  merchant  marine  by  the  direct 
and  indirect  means  enumerated  with  redoubled  energy, 
with  the  object  of  establishing  powerful  shipping  and  ship¬ 
building  industries  at  the  cost  of  Great  Britain  and  of  the 

32 


486  BRITISH  SHIPPING  AND  THE  EMPIRE 


British  Empire,  the  time  has  arrived  for  reconsidering  the 
British  navigation  policy. 

English  statesmen  and  the  English  shipping  interest 
have  favoured  the  policy  of  freedom  of  trade  and  of  the 
seas.  They  have  opened  the  harbours  and  the  trade  of  the 
Empire  to  all  comers,  and  they  are  willing  and  anxious  to 
continue  that  generous  policy.  However,  if  other  nations 
choose  to  foster  and  protect  their  own  shipping,  to  harass 
British  shipping,  and  to  encroach  in  every  possible  way 
upon  the  British  shipping  trade,  they  cannot  complain  if 
Great  Britain  and  the  British  Empire  follow  their  example, 
although  they  would  do  so  most  reluctantly.  The  Final 
Board  of  Trade  Report  stated  in  paragraph  278: 

Since  the  middle  of  last  century  the  navigation  policy 
of  this  country  has  been  based  on  the  great  ascendancy  of 
the  British  mercantile  marine  and  the  widespread  character 
of  our  trade,  which  made  protection  both  unnecessary  and 
undesirable.  Our  object  was  to  obtain  free  access  to  the 
ports  and  the  trade  of  foreign  countries.  It  was  therefore 
inexpedient  to  give  British  shipping  privileged  treatment 
at  home,  since  such  action  could  only  have  afforded  foreign 
countries  an  excuse  for  similarly  differentiating  in  favour 
of  their  own  vessels. 

The  liberal  British  policy  has  unfortunately  not  found  a 
response.  Reciprocity  is  the  soul  of  relations  between 
men  and  between  nations.  If  foreign  nations  insist  on 
maintaining  and  increasing  their  exclusive  policy,  they 
compel  and  justify  the  British  peoples  in  doing  likewise. 

The  power  and  the  prosperity  of  the  national  shipping 
industry  depends  upon  the  power  and  prosperity  of  the 
productive  industries  in  general  which  create  the  traffic. 
Vast  national  production  leads  to  a  vast  national  foreign 
trade  which  can  be  reserved  to  the  national  shipping.  The 
Final  Board  of  Trade  Report  stated  in  paragraphs  127  and 
128: 


BRITISH  SHIPPING  AND  THE  EMPIRE  487 


If  we  look  to  the  future,  the  prosperity  of  British  ship¬ 
ping  is  seen  to  depend  on  two  conditions  of  vital  impor- 
ance : 

(1)  The  maintenance  and  extension  of  British 

industry;  and 

(2)  The  development  of  the  resources  of  the  Empire 

as  a  whole. 

In  the  Empire  we  possess  resources  at  least  equal  to 
those  of  any  other  nation,  and  their  development  after  the 
War  should  give  a  powerful  stimulus  to  British  industry, 
and  therefore  to  British  shipping.  .  .  . 

In  the  past  the  maritime  ascendancy  of  this  country  has 
depended  primarily  on  the  industrial  strengt  h  of  the  United 
Kingdom,  with  the  great  flow  of  trade  to  which  it  gave 
rise;  and  unless  similar  conditions  obtain  in  the  future,  it 
will  be  difficult  to  maintain  an  adequate  mercantile  marine. 

At  present  the  United  States  are  the  wealthiest  country 
in  the  world.  They  have  the  largest  foreign  trade.  They 
believe  that  they  ought  therefore  to  have  also  the  largest 
merchant  marine.  However,  the  latent  resources  and 
possibilities  of  the  British  Empire  are  far  greater  than  those 
of  the  great  Republic.  According  to  the  Statesman’s 
Year-Book,  the  territory  of  the  British  Empire  compares 
as  follows  with  that  of  the  United  States  and  some  of  the 
other  great  nations : 


Square  Miles. 


British  Empire  (1914) 

United  States  and  Possessions 

Brazil 

Argentina 

China 

Germany  (1914) 


12,808,994 

3,574,658 

3,218,991 

1,153,119 

3,913,560 


208,780 


The  British  Empire  is  approximately  four  times  as  large 
as  the  United  States  and  their  outlying  possessions,  and  is 
larger  than  the  United  States,  Brazil,  Argentina,  China,  and 
Germany  combined.  It  extends  through  all  climes.  Its 


488  BRITISH  SHIPPING  AN D  THE  EMPIRE 


potential  wealth  is  far  greater  than  that  of  the  American 
Republic,  and  its  potential  wealth  can  be  converted  into 
actual  wealth  by  vigorous  development.  The  United 
States  have  gone  ahead  of  the  British  Empire  in  white 
population,  production,  wealth,  income,  and  trade,  owing 
to  the  vigorous  development  of  the  country.  While  the 
United  States  had  recently  251,984  miles  of  railway,  the 
British  Empire,  though  four  times  as  large  as  the  United 
States,  had  only  134,984  miles  of  railway.  Owing  to  the 
use  of  the  most  perfect  labour-saving  machinery,  the  aver¬ 
age  worker  in  the  United  States  produces  about  three  times 
as  much  as  the  average  worker  in  the  United  Kingdom. 

The  vigorous  development  of  the  Empire’s  resources  by 
the  improvement  of  harbours  and  waterways,  by  the  build¬ 
ing  of  railways,  by  the  peopling  of  the  vacant  spaces,  and 
by  the  modernising  of  the  methods  of  production,  should 
treble  and  quadruple  the  wealth,  productivity,  and 
foreign  trade  of  the  Empire  in  a  very  short  space  of  time. 
During  the  next  decade  or  two  the  foreign  trade  of  the 
world  should  increase  at  an  unprecedented  rate,  and  the 
Imperial  trade  should  become  infinitely  larger  and  more 
valuable  than  that  of  the  whole  American  continent.  The 
prospective  increase  of  the  Empire  trade  alone  should 
amply  make  up  for  that  part  of  the  international  trade 
which  British  shipping  may  lose  to  the  various  nations 
which  seem  determined  to  wrest  it  out  of  British  hands. 

The  British  Empire  possesses  not  only  the  vastest  terri¬ 
tories  in  the  world,  the  exploitation  of  which  has  scarcely 
begun,  but  it  has  resources  which  are  of  particular  value 
to  the  shipping  interest.  The  British  Empire  is  essenti¬ 
ally  a  sea  Empire.  Nearly  all  its  great  towns  lie  on 
the  sea,  and  it  possesses  a  large  number  of  the  best  com¬ 
mercial  harbours  and  coaling  stations  along  the  great  trade 
routes  of  the  world.  That  is  an  exceedingly  precious 
resource. 


BRITISH  SHIPPING  AND  THE  EMPIRE  489 


If  the  Empire  should  he  adequately  developed,  it  ought 
to  produce  more  than  half  of  the  world’s  coal  and  iron,  and 
more  than  half  of  the  world’s  exports  of  food  and  of  raw 
materials.  The  power  of  reserving  the  Empire  trade  and 
the  free  use  of  the  Empire  harbours  to  the  shipping  of  the 
Empire  and  of  those  nations  which  treat  British  shipping 
on  an  equality  should  cause  other  nations  to  hestitate  in 
differentiating  against  the  British  Empire  and  its  mercan¬ 
tile  marine.  If  the  foreign  nations  insist  upon  their  restric¬ 
tive  policy,  the  British  Empire  may  have  to  follow  suit. 
The  British  merchant  marine,  instead  of  developing  the 
world’s  trade  as  hitherto,  may  be  forced  to  develop  the 
Empire  trade,  and  the  Empire  may  benefit  greatly  from 
that  change  of  policy.  Economic  internationalism  has, 
perhaps,  had  its  day.  The  Empire  might  be  a  great  gainer 
by  such  a  development.  The  Report  of  the  Chamber  of 
Shipping  of  the  United  Kingdom  and  of  the  Liverpool 
Steamship  Owners’  Association  stated: 

The  British  shipowners  generally  fully  realise  that, 
important  as  is  that  industry  to  the  nation  and  the  Empire, 
there  are  national  and  Imperial  considerations  of  deeper 
and  greater  importance  than  its  prosperity.  .  .  .  The 
only  sure  foundation  for  the  future  success  of  the  British 
mercantile  marine  must  be  the  safety  and  the  prosperity 
of  the  nation  as  a  whole,  and  the  policy  to  be  adopted  must 
be  that  which  is  best  calculated  to  attain  that  end,  what¬ 
ever  may  be  the  disadvantages  it  imposes  on  British  ship¬ 
ping. 

Of  course,  no  one  contemplates  lightly  the  possibility  of 
the  British  Empire  adopting  an  exclusive  policy  on  the 
seas.  However,  if  the  freedom  of  navigation  should  un¬ 
happily  be  diminished  or  destroyed  by  the  action  of 
foreign  nations,  it  may  be  found  that  the  British  Empire 
would  not  be  the  principal  sufferer ;  that,  on  the  contrary, 
those  nations  may  chiefly  be  hurt  which  have  caused 


490  BRITISH  SHIPPING  AND  THE  EMPIRE 


England  to  abandon  her  policy  of  freedom  and  equality  on 
the  seas. 

The  British  Empire  possesses  along  the  world’s  great 
trade  routes  a  large  number  of  harbours  which  serve  as 
halfway  houses  to  the  world’s  shipping.  The  continued 
differential  treatment  of  shipping  by  foreign  nations  would 
logically  lead  to  preferential  treatment  on  the  part  of  the 
British  Empire  in  two  ways.  In  the  first  place,  it  would 
lead  to  the  Empire  reserving  the  inter-imperial  trade,  the 
so-called  Imperial  coasting  trade,  to  British  shipping.  In 
the  second  place  it  might,  and  possibly  would,  lead  in  some 
form  or  other  to  preferential  treatment  of  shipping  in  the 
Empire  harbours.  It  seems  unlikely  that  foreign  nations, 
desiring  to  develop  their  shipping,  will  lightly  expose  them¬ 
selves  to  a  policy  of  discrimination  and  retaliation  on  the 
part  of  the  British  Empire. 

It  should  be  observed  that  there  is  a  great  difference 
between  the  foreign  trade  of  the  United  States  and  of  Great 
Britain.  The  United  States  are  practically  self-supporting 
for  the  food  and  raw  material  upon  which  depend  the 
life  of  the  people.  Their  imports  are  mainly  luxuries. 
America’s  foreign  trade  consists  principally  of  the  exports 
of  their  surplus.  The  United  Kingdom,  on  the  other 
hand,  is  in  the  main  an  importing  country.  The  imports 
of  Great  Britain  exceed  ve^  greatly  the  exports  of  the 
country,  and  British  imports  consist  principally  of  food 
and  of  indispensable  raw  materials,  such  as  cotton,  wool, 
timber,  leather,  copper,  iron  ore,  etc.  The  instinct  of  self- 
preservation  may  compel  Great  Britain  to  adopt  a  policy 
which  favours  the  maintenance  of  the  national  shipping. 
The  position  of  the  country,  its  absolute  dependence  on 
foreign  imports,  may  compel  it  to  insist  that  British 
imports  should  be  carried  as  far  as  possible  by  British 
ships,  for  the  nation  cannot  safely  be  allowed  to  become 
dependent  for  its  indispensable  imports  of  food  and  raw 


BRITISH  SHIPPING  AND  THE  EMPIRE  491 


material  upon  the  good-will  of  foreign  nations  and  of  their 
merchant  marines.  The  experience  of  the  War  has  shown 
even  to  the  blindest  the  danger  of  following  any  other 
course. 

The  preservation  of  England’s  maritime  pre-eminence 
is  necessary,  not  only  for  reasons  of  security,  but  also  on 
financial  grounds.  As  England’s  imports  vastly  exceed 
the  country’s  exports,  there  is  a  heavy  balance  to  be  paid 
for.  Imports  are  paid  for  by  exports  of  goods,  or  of  gold, 
or  by  services  rendered  to  foreign  nations.  As  Great 
Britain  has  sold  the  bulk  of  her  foreign  investments  during 
the  War,  the  dividends  and  interest  payable  on  these 
foreign  investments  no  longer  help  in  paying  for  the  great 
excess  of  imports  over  exports.  There  is  every  reason  for 
believing  that  imports  into  Great  Britain  will  continue 
vastly  to  exceed  exports  from  Great  Britain.  Conse¬ 
quently  the  balance  in  favour  of  foreign  nations  can  be 
liquidated  only  by  means  of  services  rendered  by  England 
to  foreign  countries.  Among  these  services  shipping 
stands  foremost.  A  serious  diminution  of  England’s  mari¬ 
time  preponderance  would  endanger  not  only  the  security 
of  the  nation  both  in  time  of  war  and  peace,  but  might  in 
addition  create  a  very  serious  financial  problem. 


i 


CHAPTER  XXI 


THE  BRITISH  LAND  AND  HOUSING  PROBLEM  IN 
THE  COUNTRY  DISTRICTS 

As  a  rule,  people  discuss  the  land  problem  and  the  housing 
problem  separately.  However,  the  two  are  so  inextricably 
interwoven  that  they  ought  to  be  discussed  together.  The 
only  difference  is  this,  that  in  the  country  the  land  problem 
is  more  prominent,  while  in  the  towns  the  housing  problem 
claims  the  most  urgent  attention. 

W  hether  the  land  and  housing  problem  is  satisfactorily 
solved  with  regard  to  the  agricultural  districts  may  be 
easily  seen  from  the  populousness  of  the  country  parts, 
and  especially  from  their  productivity,  for  the  main  pur¬ 
pose  of  agriculture  is  to  produce  food.  If  we  apply  this 
test  to  the  rural  districts  of  the  United  Kingdom,  it  is 
obvious  that  the  land  and  housing  policy  has  been  an  utter 
failure.  From  decade  to  decade  the  country  population 
has  diminished  in  the  most  lamentable  manner,  and  at  the 
same  time  the  productivity  of  the  soil  has  shrunk,  while 
during  the  same  period  the  agricultural  productivity  of 
other  countries  which  are  similarly  situated  as  Great 
Britain  has  vastly  increased.  The  flight  of  the  people 
may  be  seen  from  the  figures  given  on  the  following  page. 
The  flight  from  the  country,  which  is  eloquently  attested 
by  the  figures  given,  has  had  a  most  disastrous  effect,  not 
only  upon  British  agricultural  production,  but  also  on  the 
national  physique,  on  the  health  and  strength  of  the  race. 
They  show  that  the  British  land  system  urgently  cries  for 
reform,  that  its  maintenance  is  impossible. 

492 


RURAL  LAND  AND  HOUSING  493 


Number  of  Male  Agricultural  Labourers. 


Year. 

In  England 
and  Wales. 

In 

Scotland. 

f 

In 

Ireland. 

In  the 
United 
Kingdom. 

1851 

1,097,800 

140,200 

850,100 

2,088,100 

1861 

1,073,000 

125,900 

602,200 

1,801,100 

1871 

902,800 

111,000 

509,700 

1,523,500 

1881 

807,600 

91,800 

293,300 

1,192,700 

1891 

709,300 

85,100 

251,700 

1,046,100 

1901 

583.800 

73,800 

212,200 

869,800 

1911 

622,300 

71,500 

192,100 

885,900 

Of  course,  the  shrinkage  of  the  rural  population  is  due  in 
part  to  the  introduction  of  labour-saving  machinery. 
However,  it  is  principally  attributable  to  the  fact  that 
whereas  agriculture  in  other  countries  has  prospered  and 
progressed,  it  has  utterly  decayed  in  Great  Britain.  While 
the  production  of  the  staple  crops  has  diminished  at  an 
absolutely  terrifying  rate  in  the  United  Kingdom,  the 
production  of  bread  corn  and  the  principal  vegetables  and 
of  meat  has  considerably  more  than  doubled  in  Germany 
between  1880  and  1913.  While  the  bulk  of  the  agricul¬ 
tural  land  in  Great  Britain  has  been  abandoned  by  the 
plough  and  has  been  turned  into  grazing  land,  where  rough 
grass  produces  only  an  insignificant  quantity  of  meat,  by 
far  the  larger  quantity  of  the  agricultural  soil  of  industrial 
Germany  is  devoted  to  the  most  intensive  cultivation. 
Some  years  ago  the  two  countries  compared  as  follows : 


Percentages  of  Agricultural  Soil. 


In 

Germany. 

In  Great 
Britain. 

Under  corn  crops  . . 

Per  Cent. 

61*1 

Per  Cent. 
18-2 

Under  vegetables  . . 

18-2 

9-4 

Under  fodder 

10-1 

5-9 

Under  grass  and  fallow 

8-7 

66-5 

Orchards  and  gardens 

1-9 

— 

100-0 

100-0 

494 


RURAL  LAND  AND  HOUSING 


The  frequently  heard  assertion  that  in  a  densely  popu¬ 
lated  industrial  country  there  is  no  room  for  a  flourishing 
agriculture  is  obviously  incorrect.  Germany  is  almost  as 
densely  populated  as  the  United  Kingdom,  while  the 
population  of  Belgium  per  square  mile  is  far  in  excess  of 
that  of  the  British  Isles.  Yet  both  countries  have  ex¬ 
ceedingly  productive  rural  industries.  Before  the  War 
Germany  was  practically  self-supporting  in  food,  for  her 
imports  of  bread  corn  were  counterbalanced  by  her  huge 
exports  of  sugar,  and  she  was  self-supporting  in  timber  as 
well.  Moreover,  while  vegetables,  fruit,  and  milk,  were 
scarce  and  dear  in  the  United  Kingdom,  they  were  plenti¬ 
ful  and  cheap  in  Germany.  Germany’s  superiority  in  the 
production  of  meat  and  milk  may  be  seen  from  the  follow¬ 
ing  figures : 


Dairying  and  Pig- Raising. 


In  Great 
Britain  in 
1908. 

In  Germany 
in  1907. 

Number  of  inhabitants  . . 

40,000,000 

62,000,000 

, ,  of  milch  cows  kept 

2,763,780 

10,966,998 

,,  of  pigs  . . 

2,823,482 

22,146,532 

,,  of  milch  cows  per  1,000 

inhabitants 

69 

177 

,,  of  pigs  per  1,000  inhabi¬ 
tants  . .  . . 

70 

357 

Per  thousand  inhabitants  Germany  had,  before  the  War, 
almost  three  times  as  many  milch  cows  as  Great  Britain 
and  five  times  as  many  pigs.  Milk  is  the  most  important 
food  for  the  growing  generation,  and  pork  is  the  most 
cheaply  produced  and  the  most  nourishing  and  sustaining 
meat  for  the  adults.  Owing  to  the  abundance  of  natural, 
home-grown  food,  and  especially  of  milk,  the  German 
population  is  probably  more  sturdy  than  the  English. 


RURAL  LAND  AND  HOUSING 


495 


Rickets  and  many  other  ailments  of  childhood  due  to 
under-feeding,  and  particularly  to  the  scarcity  of  milk,  are 
little  known  in  Germany. 

While  during  the  last  few  decades  the  British  country 
population  has  diminished  in  the  most  serious  manner, 
the  German  country  population  has  remained  practically 
stationary.  The  effect  of  the  introduction  of  labour- 
saving  machinery  in  the  German  countryside  has  been 
completely  offset  by  a  vastly  increased  agricultural  pro¬ 
duction.  In  1911  there  were  in  the  United  Kingdom 
918,120  agricultural  labourers  of  both  sexes,  while  in 
Germany  there  were  in  1907  no  less  than  7,283,471.  We 
can  therefore  not  wonder  that  Germany  produced  before 
the  War  nearly  ten  times  as  much  bread  corn  and  ten 
times  as  much  potatoes  as  did  Great  Britain  and  Ireland 
combined. 

If  we  inquire  why  the  British  country  population  has 
deserted  the  land  while  the  German  population  has  re¬ 
mained  on  the  soil  notwithstanding  the  lure  of  great  in¬ 
dustrial  towns  where  large  wages  can  be  earned,  we  find,  of 
course,  that  the  German  farmers  and  agricultural  labourers 
remained  on  the  land  because  they  were  satisfied  with 
their  conditions,  while  the  British  farmers  and  agricultural 
labourers  deserted  the  land  because  they  were  dissatisfied 
with  their  mode  of  life.  These  differences  in  the  two 
countries  were  due  to  the  fact  that  German  agriculture 
was  highly  prosperous  and  progressive,  while  British  agri¬ 
culture  was  hazardous,  suffering,  and  declining.  In 
Germany  the  rural  industries  were  cherished  and  promoted 
not  only  by  fiscal  protection,  but  by  every  means  available, 
such  as  the  provision  of  cheap  transport,  the  application 
of  science  to  agriculture,  etc.  In  the  United  Kingdom  the 
rural  industries  were  abandoned  and  neglected  by  the 
State,  and  they  suffered  not  only  from  the  free  competition 
of  grain  produced  on  the  boundless  plains  of  the  two 


496 


RURAL  LAND  AND  HOUSING 


Americas,  but  also  from  inequitable  transportation  charges. 
British  agriculture  was  abandoned  by  the  politicians,  not 
only  because  the  agriculturists  were  politically  unorganised 
and  could  therefore  bring  no  pressure  to  bear  upon  Parlia¬ 
ment  by  means  of  its  votes,  but  also,  and  particularly, 
because  the  democratic  parties  saw  in  the  rural  industries 
not  so  much  a  vast  army  of  farmers  and  agricultural 
labourers  who  had  a  right  to  appeal  to  general  sympathy, 
but  they  saw  in  the  rural  interest  merely  a  small  number 
of  large  landowners  for  whose  benefit  farmers  and  agri¬ 
cultural  labourers  toiled. 

From  the  point  of  view  of  ownership  agricultural 
Germany  and  agricultural  Britain  differed  as  much  as  they 
differed  in  agricultural  productivity.  The  two  countries 
compared  as  follows  during  the  last  year  for  which  com¬ 
parative  figures  can  be  furnished : 


Acreage  of  Agricultural  Land. 


Occupied  by  Owners. 

Occupied  by  Tenants. 

Per 

Per 

In  Prussia  in 

Cent. 

Cent . 

1907 

In  Great 

Britain  in 

24,422,405  hects.  =  86-6 

3,780,372  hects.  =  13-4 

1907 

3,927,303  acres  =12-2 

28,284,083  acres  =87-8 

In  Prussia  seven-eighths  of  the  agricultural  land  is  free¬ 
hold  land,  and  is  worked  by  its  owners.  In  Great  Britain 
only  one- eighth  of  the  land  is  freehold  land  and  worked  by 
its  owners.  Most  British  agriculturists  till  land  which  they 
do  not  possess,  while  most  German  agriculturists  till  their 
own  land.  That  is  a  very  significant  and  very  important 
difference,  and  the  decay  of  British  agriculture  is  largely, 
and  very  likely  chiefly,  due  not  only  to  the  free  importa¬ 
tion  of  cheap  trans- maritime  grain  and  the  disastrous 


RURAL  LAND  AND  HOUSING 


497 


effects  of  a  transport  system  which  benefited  the  foreign 
producer  and  penalised  the  domestic  farmer,  but  also  to 
the  fact  that  the  British  farmer,  and  especially  the  British 
agricultural  labourer,  had  no  substantial  territorial  stake 
in  the  country. 

The  instinct  of  property  is  deeply  ingrained  in  human 
nature.  Men  cherish  what  is  their  own  and  treat  neglect¬ 
fully  what  is  somebody  else’s.  Security  and  property  are 
most  potent  stimuli  of  human  effort.  A  tenant  farmer 
rarely  feels  that  love  for  the  land  which  is  felt  by  an  occupy¬ 
ing  owner,  and  a  landless  agricultural  labourer  leaves  the 
countryside  as  readily  for  town  as  a  bricklayer’s  labourer 
leaves  one  employer  for  another  employer.  If  a  nation 
wishes  to  obtain  the  utmost  out  of  its  land,  it  must  attach 
the  country  population  to  the  soil  by  the  strongest  ties, 
by  the  ties  of  love  and  of  interest.  Mr.  Balfour  very 
wisely  wrote  in  his  preface  to  Sir  Gilbert  Parker’s  pamphlet 
The  Land  for  the  People  : 

Multiply  as  you  will  your  enactments  for  securing  the 
fruits  of  an  improvement  to  the  man  who  makes  it,  you 
will  never  efface  the  distinction  between  ownership  and 
occupation.  It  is  based  on  sentiment,  not  on  finance;  and 
no  demonstration  of  profit  and  loss  will  extract  from  the 
tenant  of  a  County  Council  or  Public  Department  labour 
which  he  would  cheerfully  expend  upon  a  holding  which 
belonged  to  himself  and  which  he  could  leave  to  his  chil¬ 
dren. 

Countless  statements  contained  in  the  numerous  agri¬ 
cultural  investigations  made  by  the  Government  confirm 
Mr.  Balfour’s  view  that  ownership  is  superior  to  tenancy. 
For  instance,  before  the  Committee  on  Fruit  Culture,  Mr. 
Lockhurst,  Horticultural  Instructor  to  the  Derbyshire 
County  Council,  a  thoroughly  practical  man,  stated: 

At  Long  Eaton,  where  there  are  a  lot  of  lace-workers, 
there  are  now  about  300  or  400  freehold  allotments  of  about 


498 


RURAL  LAND  AND  HOUSING 


600  yards  each.  These  are  the  men  who  plant  fruit-trees, 
and  really  they  do  remarkably  well.  I  go  occasionally  to 
see  how  they  are  getting  on ;  they  arrange  well,  they  plant 
right,  and  they  prune  right.  They  have  a  thorough  grip 
of  the  whole  thing. 

Q.  As  a  rule,  who  plants  the  trees  of  these  plots,  the 
landlord  or  the  tenant  ? 

A.  They  are  freehold. 

Q.  Where  the  plots  are  not  freehold  ? 

A.  I  find  the  tenants  on  allotments,  unless  they  have 
security  of  tenure,  will  not  plant.  That  is  where  the  free¬ 
hold  comes  in. 

Q.  Who  puts  up  the  buildings  on  the  freehold  plots  ?  1 

A.  The  men  themselves. 

Q.  What  happens  in  the  case  of  allotments  that  are  not 
freehold  ? 

A.  Very  little  is  done  in  that  way. 

Q.  They  have  no  buildings  at  all  ? 

A.  Very  few  indeed. 

Many  similar  opinions  will  be  found  in  the  countless 
inquiries  into  agricultural  conditions  which  the  Govern¬ 
ment  has  made. 

British  agriculture  is,  as  far  as  its  organisation  is  con¬ 
cerned,  a  survival  of  feudal  times.  The  feudal  system 
has  had  its  uses  in  the  past,  but  it  has  had  its  day.  The 
era  of  democracy  has  arrived.  The  feudal  system  is  in¬ 
compatible  with  modern  conditions.  An  agriculture  whicli 
is  based  on  the  ownership  of  the  few  and  the  labour  of  the 
many  is  a  danger  not  only  to  the  nation,  but  also,  and 
particularly,  to  the  few  who  own  the  land.  The  feudal 
land  system  was  general  in  Europe  up  to  the  French  Revo¬ 
lution  of  1789.  The  outbreak  of  that  year  was  chiefly  due 
to  the  fact  that  the  French  farmers  were  landless,  that  they 
worked  chiefly  for  the  benefit  of  the  aristocracy  and  of  the 
Church,  who  were  the  principal  landowners.  The  distri¬ 
bution  of  land  possessed  by  the  few  among  the  many 
converted  the  French  peasants,  whose  wretchedness  and 


RURAL  LAND  AND  HOUSING 


499 


backwardness  Arthur  Young,  the  great  British  expert, 
had  so  touchingly  described,  into  prosperous,  progressive, 
and  contented  men.  The  French  peasants  who  had  been 
inclined  towards  violence  and  revolution  became  the  most 
conservative  element  in  the  State.  Henceforward  French 
revolutionaries  were  to  be  found  nearly  only  among  the 
propertyless  masses  of  the  big  towns,  and  especially  of 
Paris. 

The  fact  that  the  abolition  of  the  feudal  system  and  the 
creation  of  universal  freeholds  had  vastly  enriched  France 
and  had  converted  the  discontented  French  into  conserva¬ 
tive  and  patriotic  citizens  was  not  lost  upon  the  other 
nations  of  the  Continent.  The  landless  people  of  Prussia 
had  seen  with  indifference  their  country  overrun  by  the 
French.  To  increase  the  prosperity  of  the  Prussian  people 
and  to  attach  them  to  their  country  by  the  strongest  bonds 
of  interest,  the  great  Prussian  statesman,  Stein,  advocated 
the  conversion  of  the  landless  serf s  into  peasant  proprietors. 
Soon  after  the  disaster  of  Jena  and  Auerstadt,  Prussia, 
notwithstanding  the  poverty  which  followed  disastrous 
defeat,  set  to  work  and  divided  the  great  feudal  estates 
among  the  cultivators  of  the  soil.  In  Prussia,  as  in  France, 
this  great  reform  was  followed  not  only  by  the  regenera¬ 
tion  of  the  national  agriculture,  but  by  that  of  the  people 
as  well.  The  non-Prussian  States,  Austria,  and  the  other 
States  of  the  Continent,  followed  suit,  and  the  wonderful 
progress  of  Continental  agriculture  during  the  period 
following  the  Napoleonic  Wars  was  due  in  a  very  large 
measure  to  the  institution  of  peasant  proprietorship.  V ery 
likely  the  Russian  revolution  would  not  have  occurred,  or 
at  the  worst  would  have  been  confined  to  the  big  towns, 
had  Russia  possessed  the  system  of  peasant  proprietary. 

Occupying  ownership  has  proved  its  superiority  over 
tenancy  not  only  on  the  Continent  of  Europe,  but  in  the 
British  Dominions  and  in  the  United  States  as  well.  In 


500 


RURAL  LAND  AND  HOUSING 


the  United  States  the  percentage  of  land  cultivated  by 
occupying  owners  is  constantly  increasing,  and  that  culti¬ 
vated  under  the  tenant  system  is  equally  constantly 
-  declining.  Universal  experience  obviously  proves  the 
superiority  of  the  freehold  system  over  the  feudal  system, 
which  is  a  danger  both  economically  and  politically. 
British  agriculture  would  never  have  been  abandoned  by 
the  politicians  had  the  interests  of  the  rural  industries  been 
defended  in  Parliament,  not  by  the  representatives  of  a 
handful  of  territorial  magnates,  but  by  millions  of  sturdy 
freeholders  whose  existence  was  at  stake.  The  losses 
experienced  by  British  agriculture  fell,  after  all,  chiefly  on 
the  few  owners,  for  the  farmers  could  in  many  cases  obtain 
relief  by  a  reduction  in  the  rent,  while  the  landless  agri¬ 
cultural  labourers  could  escape  by  migrating  to  the  towns 
or  to  the  countries  overseas. 

The  conversion  of  the  British  land  system  from  a  feudal 
to  a  modern  and  democratic  organisation  is  imperative. 
The  assertions  of  those  who  maintain  that  the  existing 
system  is  best  for  Great  Britain  may  be  disregarded  in 
view  of  the  fact  that  they  are  contradicted  by  universal 
experience  and  by  the  lamentable  decline  of  British  agri¬ 
culture. 

It  is  erroneous  to  believe  that  the  landlords  are  indis¬ 
pensable  in  England’s  rural  economy.  After  all,  they  are 
principally  the  bankers  of  the  farmers,  the  only  difference 
being  that  whereas  the  regular  banker  merely  charges 
interest  for  his  assistance,  the  landlord  charges  interest 
and,  at  the  same  time,  claims  a  proportion  of  the  farmer’s 
earnings  by  insisting  upon  being  a  sleeping  partner  in  his 
farm.  The  creation  of  freehold  farms  will  lead  to  the 
development  of  rural  banking  and  to  the  development  of 
co-operation  among  farmers  similar  to  those  developments 
which  took  place  on  the  Continent  of  Europe  after  the 
downfall  of  feudalism. 


RURAL  LAND  AND  HOUSING 


501 


The  prosperity  of  British  agriculture  depends  mainly  on 
the  army  of  agricultural  labourers.  Their  contentment 
is  vital.  They  cannot  be  attached  to  the  soil  merely  by  a 
high  wage.  They  will  love  the  country  and  remain  in  it 
if  they  have  a  permanent  territorial  stake  in  it.  Every 
facility  should  be  given  to  the  agricultural  labourers  to 
acquire  land,  so  that  they  may  hope  by  industry  and 
economy  to  become  farmers  themselves.  Hitherto  only 
too  many  superannuated  agricultural  labourers  saw  them¬ 
selves  compelled,  at  the  end  of  a  life  of  toil,  either  to  be 
supported  by  charitable  people  or  to  end  their  days  in  the 
workhouse.  Every  German  agricultural  labourer,  every 
French  agricultural  labourer,  every  American  agricultural 
labourer  may  hope  to  acquire  a  small  farm  and  to 
rise  gradually  to  opulent  independence.  Many  wealthy 
farmers  on  the  Continent  of  Europe  and  in  the  United 
States  started  in  life  as  agricultural  labourers.  Every¬ 
thing  should  be  done  to  enable  competent  agricultural 
labourers  to  make  themselves  independent.  They  cannot 
be  expected  to  remain  in  the  country  if  their  life  is  merely 
a  life  of  drudgery  without  hope. 

Hitherto  the  purchase  of  land  on  the  part  of  men  of  small 
means  has  been  made  difficult  by  the  cumbersome  and 
costly  process  of  transfer.  The  title  to  land  should  be 
based,  not  on  boxes  full  of  documents,  but  on  a  simple 
entry  in  an  official  register  and  on  an  official  map.  The 
registration  of  title,  which  has  become  almost  universal 
outside  Great  Britain,  makes  land  an  easily  marketable 
commodity,  and  makes  it  an  exceedingly  attractive  invest¬ 
ment  to  men  of  small  means. 

The  most  pressing  immediate  necessity  for  attracting 
labour  to  the  land  and  retaining  the  present  labourers  on 
the  soil  is  the  provision  of  an  adequate  number  of  cottages. 
The  housing  problem  is  at  least  as  urgent  in  the  country  as 
in  the  town.  Men  cannot  be  expected  to  remain  in  the 

33 


502 


RURAL  LAND  AND  HOUSING 


country  if  they  cannot  find  adequate  house-room  for  them¬ 
selves  and  for  their  families.  The  scarcity  of  rural  cottages 
has  very  largely  been  caused  by  the  multiplication  of  so- 
called  tied  cottages  which  are  let  at  an  uneconomic  rent, 
such  as  a  shilling  or  two  per  week.  The  competition  of 
these  cottages  has  deterred  private  builders  from  build¬ 
ing.  The  provision  of  cottages  let  at  half-price  or  less  to 
agricultural  labourers  is  due  either  to  misapplied  philan¬ 
thropy  or  to  the  desire  to  retain  the  service  of  labourers 
by  unfair  means.  Probably  it  would  be  best  to  abolish  this 
evil  by  Act  of  Parliament.  If  the  agricultural  labourers 
were  given  by  law  the  right  to  acquire  the  cottages  in  which 
they  live  at  a  price  standing  in  a  certain  relation  to  the 
rent,  the  owners  of  labourers’  cottages  would,  of  course, 
immediately  charge  an  economic  rent,  and  would  be  forced 
to  add  to  the  weekly  wage  of  the  labourer  the  difference 
between  the  economic  rent  and  the  uneconomic  rent 
charged  hitherto. 

British  agriculture  suffers  from  the  fact  that  it  is  labour- 
starved.  The  countryside  can  be  made  to  flourish  only 
by  the  provision  of  vast  numbers  of  additional  labourers. 
British  agricultural  production  can  be  trebled,  but  it  can 
be  trebled  only  by  trebling  the  number  of  agricultural 
labourers,  and  the  trebling  of  these  is  possible  only  b\^ 
providing,  in  the  first  place,  adequate  and  decent  house- 
room,  and  by  giving  men  an  inducement  to  work  in  the 
country.  The  hope  of  being  able  to  acquire  their  own 
houses  and  a  small  field  on  easy  terms  would  probably 
cause  thousands  of  town  workers  who  are  tired  of  town 
life,  and  who  have  learnt  to  use  the  spade  and  fork  on  an 
allotment,  to  go  to  the  country.  After  having  served  an 
apprenticeship  of  several  years  as  agricultural  labourers 
and  put  by  a  little  money,  they  might  increase  their  little 
property,  and  might  gradually  become  themselves  sub¬ 
stantial  farmers  The  re-creation  of  British  agriculture 


RURAL  LAND  AND  HOUSING 


503 


and  of  the  British  race  urgently  demands  the  abolition  of 
the  feudal  system  in  the  country,  and  the  introduction  of 
that  democratic  system  of  general  freeholds  which  has 
proved  its  superiority  from  the  agricultural  point  of  view 
and  its  value  from  the  political  point  of  view  in  all 
countries  where  it  has  been  introduced. 


CHAPTER  XXII 


THE  BRITISH  LAND  AND  HOUSING  PROBLEM  IN 

THE  TOWNS 

Great  Britain  is  a  democracy.  In  a  country  which  is 
ruled  by  the  many  it  is  of  the  utmost  importance  that  the 
people  are  satisfied  with  their  lot.  During  the  War,  and 
especially  after  its  conclusion,  a  great  deal  of  unrest  has 
been  noticeable  among  the  working  masses.  That  unrest 
is  no  doubt  partly  due  to  that  selfishness  which  is  general 
among  men  and  to  the  activities  of  mischievous  agitators ; 
but  to  a  large  extent  it  springs  from  justified  resent¬ 
ment.  The  working  masses  have  begun  to  ask  themselves 
whether  the  conditions  under  which  they  live  are  worthy 
of  men  or  unworthy,  remediable  or  irremediable. 

The  mobilisation  of  the  nation’s  manhood  has  revealed 
the  fact  that  preventable  disease  is  widespread  among  the 
masses,  that  the  national  physique  has  seriously  deterio¬ 
rated  owing  to  insufficient  food  and  house-room.  It  is 
worth  noting  that  both  industrial  unrest  and  racial  deterio¬ 
ration  are  greatest  in  those  towns  where  industry  is  most 
active.  Sir  Donald  Maclean  stated  quite  correctly  in 
Parliament  on  April  7 : 

Among  all  the  social  questions  with  which  members  had 
to  deal  at  the  last  election,  the  housing  question  easily  took 
the  first  place.  The  revelation  of  the  housing  conditions 
under  which  tens  of  thousands  of  miners  live  was  one  of 
the  most  potent  forces  in  influencing  the  mind  of  the 
country,  as  well  as  of  the  Coal  Commission,  in  favour  of 
dealing  not  only  with  that  question,  but  with  the  problem 
as  a  whole. 


504 


URBAN  LAND  AND  HOUSING 


505 


It  is  surely  not  merely  by  coincidence  that  in  those 
districts  of  the  country  where  overcrowding  is  most 
serious  industrial  unrest  is  greatest  and  the  physique  of 
the  people  is  worst.  Analytical  examination  of  the  Census 
and  of  various  other  Government  reports  reveals  the  fact 
that  housing  conditions  are  far  worse  in  the  North  of 
England  than  in  the  South  and  the  Centre  of  the  country, 
and  that  they  are  worst  of  all  in  Scotland,  and  especially 
on  the  Clyde,  which  during  and  after  the  War  has  been  the 
greatest  hotbed  of  revolutionary  anarchism.  It  is  usually 
considered  that  those  houses  are  overcrowded  which  con¬ 
tain  more  than  two  occupants  to  each  room.  Now,  accord¬ 
ing  to  the  Census  of  England  and  Wales  of  1911,  over¬ 
crowding  existed  on  the  following  scale  in  some  representa¬ 
tive  towns : 


In  Gateshead  ... 

337  per  1,000  of  population. 

In  South  Shields  . . 

. .  329 

9  9 

9  9 

In  Sunderland 

. .  326 

9  9 

99 

In  Newcastle-on-Tyne  . . 

. .  317 

9  9 

9  9 

In  Tynemouth 

. .  308 

99 

99 

In  Derby  . . 

18 

9  9 

99 

In  Burton-upon-Trent  .  . . 

15 

9  9 

99 

In  Ipswich 

13 

9  9 

99 

In  Northampton  . . 

11 

9  9 

9  9 

In  Leicester 

11 

9  9 

9  9 

The  first  five  towns,  those  on  the  Tyne,  are  towns  in 
which  overcrowding  was  greatest  in  1911.  The  last  five 
towns  are  those  in  which  overcrowding  was  smallest  at  the 
time  when  the  Census  was  taken. 

Across  the  Scotch  border  housing  conditions  are  even 
worse  than  in  England.  According  to  the  official  paper, 
Housing  Conditions  (Scotland)  (Cd.  4016),  1908,  2,042,945 
people,  or  45*68  per  cent,  of  the  inhabitants  of  Scotland, 
were  found  to  live  in  overcrowded  dwellings.  The  following 
table  gives  some  of  the  worst  instances  of  overcrowding : 


506 


URBAN  LAND  AND  HOUSING 


Percentage  of  Population  of  Scotland  living  tn 
Overcrowded  Dwellings. 


Per  Cent. 

Per  Cent. 

Clydebank 

. .  72-97 

Kilmarnock  . . 

. .  55-94 

Motherwell 

. .  71-43 

Glasgow 

.  .  54-70 

Coatbridge 

. .  70-58 

Falkirk 

. .  54-61 

Port  Glasgow  . . 

.  .  66-42 

Greenock 

.  .  54-17 

Govan 

. .  63-77 

Forfar 

. .  49-86 

Paisley 

.  .  58-76 

Dundee 

.  .  49-44 

Dumbarton 

.  .  57-65 

Leith 

. .  43-80 

According  to  the  Report  mentioned,  of  the  Scotch  popu- 

lation  1,024,707, 

or  22-91  per  cent.,  almost  one-quarter  of 

the  total,  lived  herded  four  and  more  in  one  room,  and  the 
“  homes  ”  of  2,259,789  Scotch  people,  or  51*9  per  cent,  of 
the  population,  consisted  of  one-room  and  two-room  dwell¬ 
ings.  There  is  obviously  some  reason  for  Scotland  inclin¬ 
ing  towards  Radicalism. 

It  will  be  observed  from  the  figures  given  that  over¬ 
crowding  was  in  1911  most  serious,  as  far  as  England  is 
concerned,  on  the  Tyne,  while  in  Scotland  overcrowding 
was  even  worse  than  in  England,  and  it  was  particularly 
severe  on  the  Clyde.  During  the  War  tens  of  thousands 
of  workers  went  to  swell  the  population  of  these  over¬ 
crowded  districts.  We  can  therefore  not  wonder  that 
shipbuilding  and  ship-repairing  suffered  particularly  from 
labour  trouble,  and  that  agitators  bent  upon  mischief 
found  the  Tyne  and  Clyde  districts  a  particularly  congenial 
and  receptive  soil. 

The  fact  that  serious  overcrowding  is  likely  to  breed 
dissatisfaction  is  shown  by  the  extraordinary  statistics 
given.  The  fact  that  overcrowding  leads  to  physical 
deterioration  can  also  be  proved  by  statistics  which  are 
based  upon  searching  and  conscientious  enquiry.  For 
instance,  during  1905-06  the  School  Board  of  Glasgow  had 
72,857  school-children  measured  and  weighed  in  order  to 
solve  the  question  whether,  and  in  how  far,  housing  affects 


URBAN  LAND  AND  HOUSING 


507 


the  physique  of  the  people.  In  its  Report  (Gd.  2637)  the 
result  of  that  investigation  was  summed  up  in  the  follow¬ 
ing  figures : 


Average  Weight  and  Height  of  All  Children 
(Age  5  to  18)  examined. 


Average 

Weight. 

Average 

Height. 

Boys  from  one-roomed  homes 

Pounds. 

52-6 

Inches. 

46*6 

,,  ,,  two-roomed  ,, 

56-1 

48*1 

,,  ,,  three-roomed  ,, 

60-0 

50-0 

,,  ,,  four-roomed  ,, 

64-3 

51-3 

Girls  ,,  one-roomed  ,, 

51-5 

46*3 

,,  ,,  two-roomed  ,, 

54-8 

47*8 

,,  ,,  three-roomed  ,, 

59-4 

49*6 

,,  ,,  four-roomed  ,, 

65-5 

51-6 

The  figures  given  reveal  the  fact  that  housing  has  the 
most  extraordinary  effect  upon  physique.  Commenting 
upon  the  figures  given,  the  Report  stated : 

These  figures  show  that  the  one-roomed  child,  whether 
boy  or  girl,  is  always,  on  the  average,  distinctly  smaller 
and  lighter  than  the  two-roomed;  and  the  two-roomed 
than  the  three-roomed;  and  the  three-roomed  than  the 
four-roomed.  The  numbers  examined  are  so  large  and  the 
results  are  so  uniform  that  only  one  conclusion  is  possible 
— viz.,  that  the  poorest  child  suffers  most  in  nutrition  and 
growth.  It  cannot  be  an  accident  that  boys  from  one- 
roomed  homes  should  be  11*7  pounds  lighter  on  an  average 
than  boys  from  four-roomed  homes,  and  4«7  inches  smaller. 
Neither  is  it  an  accident  that  girls  from  one-roomed  homes 
are  on  an  average  14  pounds  lighter  and  5*3  inches  shorter 
than  the  girls  from  four-roomed  homes. 

Of  course,  it  must  be  borne  in  mind  that  inadequate 
housing  accommodation  is  usually  accompanied  by  in¬ 
adequate  food  and  sometimes  by  inadequate  clothing. 


508 


URBAN  LAND  AND  HOUSING 


Still,  it  is  obvious  that  people  who  live  in  densely  over¬ 
crowded,  dingy,  airless,  and  more  or  less  insanitary  dwell¬ 
ings  are  likely  to  suffer  in  health  even  if  they  should  be 
adequately  fed  and  clothed.  The  existing  statistics  show, 
moreover,  that  a  high  death-rate  accompanies  over¬ 
crowding.  The  death  rate  rises  together  with  the  over¬ 
crowding  statistics. 

Insufficiency  of  housing  and  consequent  overcrowding, 
and  the  existence  of  numerous  ill-built  and  insanitary 
houses,  is  a  crying  and  terrible  evil  which  must  be  stamped 
out  with  the  utmost  energy  and  rapidity.  Adequate 
houses  for  the  toiling  masses  must  be  provided,  and  the 
cost  is  quite  a  secondary  consideration.  The  national 
expenditure  on  dwellings  fit  for  habitation  will  be  more 
than  paid  for  in  the  improvement  of  the  national  health 
and  in  the  contentment  of  the  workers.  A  healthy  and 
contented  worker  is  an  asset ;  a  sickly  and  discontented  one 
a  liability,  and  possibly  a  danger. 

According  to  the  Bill  laid  by  Dr.  Addison  before  Parlia¬ 
ment  in  April,  1919,  hundreds  of  thousands  of  houses  will 
be  built  with  the  co-operation  of  the  State  and  of  the 
Local  Authorities.  The  housing  campaign  which  has 
thereby  been  opened  is  highly  welcome.  However,  the 
provision  of  hundreds  of  thousands  of  well-built  houses, 
of  which  a  large  number  should  be  built  in  well-planned, 
well -laid- out,  pleasant  and  wholesome  model  settlements, 
will  not  suffice  to  solve  the  urban  housing  problem  in  its 
entirety. 

The  great  characteristics  of  the  British  working  masses 
are  their  thriftlessness  and  their  restlessness,  two  qualities 
which  are  exceedingly  dangerous  in  a  democracy.  The 
people  on  the  Continent  and  the  American  people  are  far 
more  thrifty  and  provident  than  are  the  English  people. 
The  English  emigrants  themselves  become  provident  and 
thrifty  when  they  leave  their  own  country  for  the  United 


URBAN  LAND  AND  HOUSING 


509 


States  or  for  the  Dominions.  Providence  is,  of  course, 
encouraged  if  people  are  offered  a  very  attractive  invest¬ 
ment.  Savings  are  discouraged  if  there  are  no  attractive 
investments  within  the  reach  of  the  toiling  masses.  It  is 
a  natural  instinct  in  men  that  they  desire  to  possess,  en¬ 
tirely  and  absolutely,  things  of  permanent  value.  It  is  a 
natural  instinct  in  men  that  they  desire  to  possess  abso¬ 
lutely  not  only  the  furniture  which  they  use,  but  also  the 
houses  in  which  they  live  and  a  piece  of  ground.  Thrift 
has  been  enormously  encouraged  on  the  Continent  of 
Europe,  in  the  United  States,  and  in  the  British  Dominions, 
by  facilities  offered  to  the  workers  of  acquiring  freehold 
land  and  houses  of  their  own.  The  vast  majority  of  the 
houses  in  Germany,  France,  Holland,  Belgium,  Austria, 
Italy,  the  United  States  and  Canada,  are  owned  by  the 
people  inhabiting  them.  The  possibility  of  acquiring 
houses,  cottages,  and  business  premises,  not  on  lease, 
but  as  a  perpetual  possession,  is  an  exceedingly  strong 
inducement  to  thrift.  The  man  of  small  means  is  not 
satisfied  with  the  insignificant  return  made  by  the  savings 
banks,  and  as  he  does  not  care  to  invest  his  money  in 
Stock  Exchange  securities  which  he  does  not  understand, 
he  is  apt  to  spend  all  he  earns ;  but  he  would  gladly  save 
could  he  invest  his  savings  in  land  and  buildings  which 
would  be  his  for  ever.  The  preference  of  working-men 
for  freehold  houses,  if  such  are  obtainable,  is  well  known, 
and  was  well  brought  out  by  the  examination  of  several 
witnesses  examined  by  the  Select  Commtitee  on  Town 
Holdings.  For  instance,  Mr.  John  Green,  a  working-man 
who  had  been  employed  during  twenty-eight  years  at 
the  Royal  Arsenal  in  Woolwich,  was  examined  as  fol¬ 
lows  : 

Q.  You  think  that  the  workmen  have  a  desire  to  obtain 
the  freehold  of  their  own  houses  for  the  benefit  of  the 
families  in  preference  to  leaseholds  ? 


510 


URBAN  LAND  AND  HOUSING 


A.  Equally  so  as  much  as  an  aristocrat,  because  the  idea 
of  the  workman  is  to  benefit  his  family ;  but  he  resents  this 
continual  drain  upon  the  savings  of  his  class  by  the  ground 
landlord. 

Q.  Then  you  think  the  workman  is  as  proud  of  his  little 
estate  as  the  larger  man  of  a  large  estate  ? 

A.  Equally  so;  and  he  would  wish  to  hand  that  little 
estate  down  to  his  family,  even  if  only  a  two-roomed 
cottage  with  a  small  bit  of  garden.  .  .  .  In  my  opinion 
it  would  be  a  very  great  inducement  to  thrift  and  economy 
on  the  part  of  the  working-man,  because  I  know  there  are 
scores  of  working-men  in  the  Arsenal  who  have  money,  and 
who  rightly  refuse  to  invest  it  in  leasehold  property ;  but 
if  they  could  buy  freehold  it  would  have  a  great  tendency 
to  keep  the  workman  away  from  the  public-house.  It 
would  take  him  into  his  garden,  his  greenhouse,  or  his 
workshop. 

Before  the  same  Committee,  Mr.  Benjamin  Jones,  repre¬ 
senting  the  Union  of  Working  Men  Co-operators,  stated: 

We  co-operators  think  that  every  man  in  the  nation  has 
a  right  to  have  some  stake  in  the  country,  and  we  are 
trying  as  fast  as  we  can  to  make  every  working-man  into 
a  small  capitalist.  He  cannot  be  a  capitalist  unless  he  has 
some  means  of  investing  his  money.  An  enlightened,  intel¬ 
ligent,  and  well-educated  man  may  not  be  frightened  of 
investing  his  money  in  all  parts  of  the  earth,  but  a  working¬ 
man  naturally  wants  to  see  his  money  near  at  hand,  and  we 
say  that  for  the  public  good  it  is  absolutely  necessary  that 
the  working-man  should  have  some  opportunity  to  invest 
his  money  near  at  home,  and  so  induce  him  to  be  provi¬ 
dent.  .  .  .  We  object  to  being  compelled  to  hand  over 
at  the  end  of  the  term  all  the  property  that  we  have  put 
on  the  land.  It  is  impossible  for  me  to  express  in  strong 
enough  terms  the  working-men’s  detestation  of  the 
present  system. 

In  most  British  towns  land  and  houses  are  owned  by  the 
few.  The  natural  desire  of  the  workers  to  acquire  their 
own  houses  with  their  savings  and  to  leave  them  to  their 


URBAN  LAND  AND  HOUSING 


511 


descendants  is  thwarted.  The  fact  that  the  vast  majority 
of  the  people  occupy  houses  which  are  not  their  own 
converts  the  nation  into  a  nation  of  lodgers.  ’Thus  the 
leasehold  system  creates  not  only  thriftlessness  and 
improvidence,  but  also  that  spirit  of  restlessness  which  is 
dangerous  in  a  democracy.  The  British  nation  is  a  nation 
of  dissatisfied  lodgers. 

The  leasehold  system  possesses  numerous  serious  dis¬ 
advantages.  It  causes  wastefulness,  for  people  treat 
badly  houses  which  are  not  their  own.  Consequently  the 
repairs  of  leasehold  houses  and  cottages  are  exceedingly 
heavy.  Besides,  it  creates  much  unnecessary  friction 
within  the  community,  and  creates  not  only  hatred  against 
the  landlords,  but  against  property-owners  of  every  kind. 

The  leasehold  system  causes  shoddy  building,  for  houses 
are  erected  to  let,  but  not  to  last;  and  it  creates  the  slum, 
for  houses  the  lease  of  which  is  running  out  are  apt  to  be 
utterly  neglected  by  their  owners  and  by  the  various 
people  who,  through  letting  and  subletting,  may  have  an 
interest  in  the  property.  ' 

Many  official  Commissions  and  Committees  have  recom¬ 
mended  the  creation  of  numerous  freeholds  for  the  benefit 
of  the  working  masses,  but  hitherto  their  recommenda¬ 
tions  have  been  disregarded.  For  instance,  the  Report 
of  the  Royal  Commission  on  the  Housing  of  the  Working 
Classes  stated : 

Your  Majesty’s  Commissioners  recommend  generally, 
with  reference  to  all  kinds  of  dwellings,  that  facilities 
should  be  given  to  allow  capital  to  be  repaid  in  rent  with 
a  view  to  giving  to  tenants  facilities  for  becoming  free¬ 
holders. 

That  recommendation  was  made  in  1885,  but,  like  so  many 
excellent  recommendations,  was  not  acted  upon  by  short¬ 
sighted  party  politicians. 


512 


URBAN  LAND  AND  HOUSING 


At  present  the  acquisition  of  a  freehold  house  is  almost 
impossible  to  men  of  small  means,  and  especially  to  work¬ 
ing-men,  because  owners  frequently  do  not  care  to  sell, 
and  particularly  because  the  purchase  of  a  house  is  a  cum¬ 
bersome  and  outrageously  expensive  transaction.  The 
title  to  a  piece  of  land  does  not  consist  in  an  entry  in  an 
official  register,  which  is  guaranteed  by  the  State  or  by  the 
Local  Authority,  but  in  a  number  of  documents  which  may 
or  may  not  be  valid.  In  an  apparently  sound  title  there 
may  be  a  flaw,  and  the  examination  of  the  title-deeds 
requires  a  considerable  amount  of  time  and  a  very  large 
expenditure  of  money,  and  even  then  there  is  a  certain 
amount  of  risk.  So  the  working-man  is  afraid  of  acquiring 
a  piece  of  land  or  a  freehold  house,  especially  as  he  has  no 
secure  place  in  which  he  can  keep  his  deeds.  On  the 
Continent  the  title  to  real  property  rests  in  an  entry  in  an 
official  land  register.  Land  and  houses  can  be  bought  and 
sold  as  easily,  as  quickly,  and  almost  as  cheaply,  as  furni¬ 
ture  or  as  stocks  and  shares,  and  any  mistake  made  by  the 
registering  authority  falls,  not  on  the  purchaser,  but  has 
to  be  made  good  by  the  registering  authority  itself.  The 
result  is  that  on  the  Continent  land  and  houses  are  con¬ 
sidered  the  most  desirable  investment  for  farmers,  peas¬ 
ants,  small  tradesmen  in  towns,  and  even  by  the  great 
body  of  wage-earners  in  factories. 

On  the  Continent,  in  those  towns  where  large  houses  let 
in  flats  are  general,  it  is  comparatively  difficult  for  men  of 
small  means  to  have  a  freehold  house  of  their  own.  In 
the  smaller  towns  freehold  houses  are  general.  The 
United  Kingdom  is  ideally  situated  for  instituting  the  free¬ 
hold  system  in  the  towns,  because  the  vast  majority  of 
people,  even  in  London,  live,  not  in  huge  barrack-like 
houses,  as  people  do  in  Paris,  Berlin,  Vienna,  etc.,  but  in 
small  houses  and  cottages  of  four,  five,  or  six  rooms.  The 
fact  that  there  is  a  strong  desire  among  the  people  to 


URBAN  LAND  AND  HOUSING 


513 


ac  quire  houses  of  their  own  is  eloquently  attested  by  the 
numerous  building  societies,  with  the  help  of  which  men 
of  small  means  have  acquired  a  very  large  number  of 
leasehold  houses. 

The  congestion  of  the  British  industrial  towns  and  the 
existence  of  a  great  deal  of  preventable  overcrowding  is 
due  to  a  scarcity  of  houses.  This  scarcity  has  been  caused 
largely  through  the  mistaken  legislation  of  1909.  Out  of 
every  twenty  houses  occupied  by  the  working  classes, 
built  before  the  War,  nineteen  were,  according  to  Dr. 
Addison,  built  by  private  enterprise.  By  penalising  the 
speculative  builder  and  by  frightening  the  owner  of  house 
property,  the  Government  brought  the  building  of  houses 
almost  to  a  standstill.  Meanwhile  existing  houses  decayed 
and  the  population  kept  increasing.  Thus  legislation 
which  was  aimed  at  improving  the  housing  of  the  people 
actually  resulted  in  creating  overcrowding. 

Overcrowding  is  due  not  only  to  the  fact  that  there  is  an 
insufficient  number  of  houses,  but  that  working  people 
insist  upon  living  close  to  their  place  of  work  instead  of 
settling  farther  out,  where  they  could  dwell  in  better  air 
and  happier  surroundings.  The  congestion  of  the  indus¬ 
trial  towns  is  partly  due  to  insufficient  means  of  communi¬ 
cation  between  the  industrial  centres  and  the  surrounding 
country,  partly  to  the  high  fares  charged.  Dr.  Addison 
stated  in  his  speech  of  April  7,  1919: 

It  is  a  significant  fact  that  in  1907,  of  the  500,000  people 
employed  in  factories  in  London,  346,000  dwelt  in  the  inner 
zone,  only  168,000  in  the  middle  zone,  and  35,000  in  the 
outer  zone.  That  was  to  say,  practically  three-quarters 
of  the  people  employed  in  factories  in  London  dwelt  near 
their  work.  It  is  clear  that  until  there  was  vastly  in¬ 
creased  means  of  transport,  until  there  was  much  better 
factory  development  outside  the  City,  this  problem  would 
be  urgent  and  acute  in  the  great  centres  of  population.  .  .  . 
We  want  to  improve  our  transport  system  so  that  people 
can  more  readily  get  farther  out. 


514 


URBAN  LAND  AND  HOUSING 


The  United  Kingdom  suffers  from  an  insufficiency  of 
tramways  and  other  means  connecting  the  towns  with  the 
suburbs,  and  from  unduly  high  fares.  The  development 
of  suburban  traffic  has  unfortunately  been  seriously 
hampered  by  Parliament  giving  to  the  Local  Authorities 
a  traffic  monopoly.  Municipal  enterprise  has  been  a 
failure.  The  Local  Authorities  have  created  a  totally 
insufficient  service,  which  works  at  unduly  high  cost.  In 
the  United  States  private  enterprise  has  created  tramways 
the  mileage  of  which  vastly  exceeds  the  total  railway 
mileage  of  the  United  Kingdom.  The  British  tramway 
system  may  be  more  substantially  built,  but  the  un¬ 
fortunate  workers  cannot  get  out  of  the  towns  because  the 
.facilities  are  insufficient  and  the  fares  too  high.  The  de¬ 
mands  of  the  railwaymen  and  the  omnibus  and  tramway 
employees  for  higher  wages  have  led  to  a  further  increase 
in  fares,  which  is  bound  to  deter  the  workers  from  settling 
farther  out.  High  fares  are  as  much  responsible  for  the 
existence  of  the  slums  as  the  absence  of  a  sufficient  number 
of  houses. 

The  creation  of  the  freehold  system  in  the  towns  is  desir¬ 
able  and  urgent  for  many  reasons.  The  existence  of 
millions  of  freeholders  should  lead  to  better  housing,  for 
men  take  good  care  of  houses  which  are  their  own.  More¬ 
over,  the  freehold  system  would  improve  not  only  the 
physical  health  of  the  country,  but  its  political  and  social 
health  as  well.  It  is  dangerous  for  a  nation  where  the 
many  rule  that  the  bulk  of  the  land  in  town  and  country 
should  be  in  the  hands  of  the  few.  The  result  has  been 
that  the  landowners  and  the  houseowners  have  been  treated 
by  the  politicians  as  if  they  were  the  natural  enemies  of  the 
people.  Thus  the  masses  have  been  taught  to  look  for  an 
improvement  of  the  housing  conditions  rather  to  the 
Government  than  to  rely  upon  their  own  exertions,  and  to 
expect  an  improvement  in  housing  rather  from  expropri- 


URBAN  LAND  AND  HOUSING 


515 


ation  than  from  thrift.  These  ideas  are  very  dangerous, 
and  they  may  prove  fatal  to  England’s  peace  and  future. 

The  freehold  system,  the  system  whereby  a  large  land- 
owner  only  lends,  but  does  not  sell,  his  ground,  and  insists 
upon  acting  as  a  sleeping  partner  in  the  business  which  is 
carried  on  upon  it,  is  disadvantageous  not  only  to  the 
worker,  but  also  to  the  business  man.  He  is  hedged  about 
by  numerous  conditions.  His  freedom  of  action  is  cur¬ 
tailed  in  many  directions,  and  at  the  expiration  of  the 
lease  he  may  be  faced  by  the  alternative  of  either  submit¬ 
ting  to  extortion  or  of  moving  his  business  elsewhere.  Be¬ 
sides,  the  cumbrous  system  of  land  transfer  causes  endless 
delays.  It  often  takes  an  English  business  man  longer 
to  find  out  the  soundness  of  his  title  than  it  takes  a  Ger¬ 
man,  French,  or  American  business  man  to  acquire  his 
land  and  to  build  his  factory. 


CHAPTEB  XXIII 


THE  INEFFICIENCY  OF  BRITISH  INDUSTRIAL 

PRODUCTION — II. 

The  Facts  op  the  Case. 

Industrial  efficiency  begets  prosperity,  and  prosperity 
leads  to  general  contentment.  Industrial  inefficiency 
bring  about  poverty,  unemployment,  and  general  dis¬ 
satisfaction  and  unrest.  England’s  industrial  and  social 
difficulties  are  largely  due  to  the  backwardness  of  her 
industries. 

Prosperity  depends  mainly  on  production.  Those 
nations  are  the  wealthiest  where  production  per  man  is 
greatest.  With  the  help  of  the  most  perfect  organisation 
and  of  the  best  labour-saving  machinery  an  intelligent 
artisan  can  produce  as  much  as  a  number  of  artisans 
produced  by  the  more  primitive  methods  of  the  past. 
The  result  is  that  the  highly  productive  workers  of 
the  present  possess  comforts  and  conveniences  without 
number  which  were  out  of  reach  of  their  forefathers, 
and  which,  in  the  time  preceding  the  industrial  revolution, 
were  highly  prized  luxuries  to  men  of  the  middle  class. 

The  most  progressive  and  the  most  prosperous  nation 
is  the  American  nation .  The  United  States  have  advanced 
with  giant  strides.  In  1821  the  United  Kingdom  had 
21,272,187  inhabitants,  and  the  United  States  had  only 
9,638,453  inhabitants.  There  were  then  two  Englishmen 
to  every  single  American.  Now  the  United  Kingdom 
has  about  47,000,000  inhabitants,  and  the  United  States 

516 


BRITISH  INDUSTRIAL  INEFFICIENCY  517 


have  more  than  100,000,000  inhabitants.  There  are  now 
two  Americans  for  every  single  Englishman.  Only  a 
few  decades  ago  the  United  Kingdom  was  considerably 
richer  than  the  United  States.  Now  the  United  States 
are  considerably  wealthier  than  all  the  States  of  the 
British  Empire  combined.  England  has  ceased  to  be 
the  leading  Anglo-Saxon  nation  both  in  population  and  in 
wealth.  That  is  a  very  serious  matter,  for  numbers  and 
wealth  are  the  main  pillars  of  nations ;  they  are  the  founda¬ 
tions  of  national  strength  and  independence. 

It  is  frequently  asserted  that  the  vast  wealth  of  the 
United  States  is  due  to  their  magnificent  natural  resources. 
That  is  scarcely  correct.  The  area  of  the  British  Empire 
is  more  than  four  times  as  large  as  that  of  the  United 
States.  The  natural  resources  of  the  British  Empire  are 
probably  far  greater  than  those  of  the  United  States. 
The  United  States  are  wealthier  than  the  British  Empire, 
not  because  the  natural  resources  of  America  are  greater, 
but  because  the  production  of  the  American  workers  is 
far  greater  than  that  of  the  British  workers.  Production 
is  wealth.  With  the  help  of  an  excellent  organisation 
and  of  the  most  perfect  and  the  most  powerful  labour- 
saving  machinery  the  average  worker  in  the  United  States 
produces  approximately  three  times  as  much  as  does  his 
British  colleague  who  is  employed  in  the  identical  calling. 

The  statement  that  the  average  American  worker  in 
the  factory  and  the  workshop,  in  the  mine  and  on  the  farm, 
on  the  railway  and  in  the  counting-house,  does  about 
three  times  as  much  work  as  his  British  colleague,  seems 
at  first  sight  to  be  a  reckless  overstatement.  Yet  that 
statement  is  correct,  and  its  correctness  can  be  proved  by 
means  of  reliable  official  figures. 

The  United  States  have  combined  with  their  periodical 
Census  of  Population  a  Census  of  Production  which 
records  the  productivity  of  the  various  industries  in  full 

34 


518  BRITISH  INDUSTRIAL  INEFFICIENCY 


detail.  The  United  Kingdom,  which  in  the  past  has 
taken  only  Censuses  of  Population,  has  at  last  followed 
America’s  example;  it  has  taken  in  1908,  for  the  first  time, 
a  Census  of  Production  which  relates  to  the  year  1907. 
The  American  Census  of  Production  nearest  in  date  to 
the  first  British  Census  of  Production  is  that  for  the  year 
1 909.  The  interval  of  two  years  between  the  two  Censuses 
is  only  small.  Consequently,  we  can  fairly  compare 
British  and  American  production  by  means  of  the  two 
industrial  Censuses  mentioned. 

There  is  a  difficulty  in  comparing  the  results  of  the 
two  official  investigations.  Many  industries  have  been 
classified  in  different  ways  in  the  two  countries.  If  we 
leave  out  of  account  those  industries  which  are  not  com¬ 
parable  because  they  have  been  grouped  and  classified 
in  such  a  manner  as  to  be  not  readily  comparable,  there 
remains  a  residue  of  twenty-six  industries  in  which  the 
grouping  has  been  practically  identical.  These  twenty  - 
six  industries  allow  us  to  compare  British  and  American 
production  per  worker  employed,  and  a  careful  comparison 
of  the  figures  given  shows  that  in  these  the  American 
worker  produced  in  1909  approximately  three  times 
as  much  as  did  his  British  competitor  in  1907.  That 
fact  is  clearly  brought  out  by  the  table  on  p.  519. 

It  will  be  noticed  that  production  per  worker,  both 
per  week  and  per  year,  is  almost  three  times  as  great  in 
the  United  States  as  in  Great  Britain.  However,  while 
the  most  efficient  British  industry,  the  huge  cotton  in¬ 
dustry,  is  included  in  the  table,  the  most  efficient  American 
industries,  the  gigantic  iron  and  steel  industry  and  the  vast 
engineering  industry,  are  excluded,  because  the  different 
classification  and  subdivisions  adopted  in  the  two 
countries  make  comparison  between  these  industries 
impossible.  Thus  the  comparison  is  perhaps  unduly 
favourable  to  England.  Had  it  been  possible  to  include 


BRITISH  INDUSTRIAL  INEFFICIENCY  519 


Gross  Output  per 
Worker  per  Year. 

Net  Output  per 
Worker  per  Week. 

United 
States 
in  1909. 

United 
Kingdom 
in  1907. 

United 
States 
in  1909. 

United 
Kingdom^ 
in  1907. 

£ 

£ 

£ 

s. 

d. 

£ 

s. 

d. 

Boots  and  shoes 

516 

171 

3 

10 

0 

1 

7 

4 

Cardboard  boxes 

275 

106 

2 

15 

0 

1 

0 

0 

Butter  and  cheese  . . 

2,979 

1,310 

8 

3 

0 

2 

8 

1 

Cement 

472 

192 

4 

17 

8 

2 

10 

10 

Clothing 

484 

158 

4 

7 

4 

1 

3 

11 

Cocoa,  chocolate,  and 
confectionery 

662 

296 

4 

18 

5 

1 

12 

3 

Cotton  goods 

332 

236 

2 

13 

9 

1 

10 

6 

Clocks  and  watches . . 

296 

137 

4 

3 

0 

1 

7 

9 

Cutlery  and  tools 

323 

164 

4 

1 

6 

1 

8 

1 

Dyeing  and  finishing 
textiles 

379 

184 

4 

4 

3 

1 

18 

11 

Gasworks 

897 

422 

11 

16 

7 

4 

1 

1 

Firearms  and  ammu¬ 
nition 

464 

152 

4 

9 

2 

2 

2 

8 

Gloves 

416 

233 

3 

10 

9 

1 

11 

2 

Hats  and  caps 

414 

149 

4 

1 

10 

1 

5 

10 

Hosiery 

309 

184 

2 

2 

6 

1 

3 

5 

Leather  tanning  and 
dressing 

1,054 

686 

4 

13 

1 

2 

5 

0 

Lime  . . 

258 

141 

3 

2 

4 

1 

13 

5 

Brewing  and  malting 

6,209 

937 

19 

10 

5 

6 

7 

3 

Matches 

1,729 

408 

7 

3 

1 

1 

13 

0 

Paint,  colours,  and 
varnish 

4,012 

1,375 

12 

9 

3 

3 

16 

2 

Paper . . 

15,846 

4,201 

5 

3 

5 

2 

2 

8 

Pens  and  pencils 

710 

241 

4 

5 

9 

1 

9 

8 

Printing  and  publish¬ 
ing  . . 

1,154 

1,133 

7 

16 

11 

3 

13 

1 

Railway  vehicles 

2,274 

1,127 

4 

0 

5 

2 

7 

5 

Silk  goods 

989 

608 

3 

9 

3 

1 

1 

2 

Soap  and  candles 

2,160 

1,092 

11 

7 

8 

2 

19 

8 

Average  per  worker 
for  all  the  indus¬ 
tries  enumerated  . . 

1,747 

617 

5 

17 

7 

2 

3 

1 

520  BRITISH  INDUSTRIAL  INEFFICIENCY 


in  the  table  the  iron  and  steel  industry  and  the  engineer¬ 
ing  industry,  it  would  probably  be  found  that  the  average 
production  per  worker  was  fully  three  times  as  great  in 
the  United  States  as  in  the  United  Kingdom. 

America’s  superiority  in  production  per  worker  is 
practically  universal,  but  it  varies  greatly  in  the  different 
industries  enumerated.  It  is  smallest  in  the  cotton 
industry,  in  which  the  American  worker  produces  about 
50  per  cent,  more  than  the  British  worker.  On  the  other 
hand,  American  production  per  worker  is  considerably 
more  than  three  times  as  great  as  British  production 
per  worker  in  the  making  of  clothing,  silk  goods,  matches, 
etc.,  in  which  the  Americans  use  a  great  deal  of  auto¬ 
matic  machinery  which  is  little  employed  in  the  United 
Kingdom. 

Some  readers  may  say:  “  These  comparisons  are  not 
fair.  Measured  in  money,  American  workers  produce 
three  times  as  much  as  English  workers  because  American 
goods  are  more  expensive  than  British  goods.”  That 
argument  must,  of  course,  be  answered. 

The  values  given  in  both  the  British  and  the  American 
Censuses  are  wholesale  values  at  factory.  Now,  although 
before  the  war  the  retail  prices  of  many  goods  were  higher 
in  the  United  States  than  in  the  United  Kingdom,  whole¬ 
sale  prices  were  almost  identical  in  the  two  countries. 
If  wholesale  prices  in  the  United  States  were  considerably 
higher  than  in  the  United  Kingdom,  the  United  States 
could,  of  course,  not  compete  with  British  goods  in 
foreign  markets.  However,  American  goods  are  sold 
freely  in  competition  with  British  goods,  not  only  in 
foreign  countries,  but  also  in  Great  Britain.  Everyone 
knows  that  American  steel,  machines,  implements,  tools, 
hardware,  motor-cars,  sewing-machines,  typewriters, 
desks,  pencils,  watches,  chemicals,  photographic  appara¬ 
tus,  etc.,  are  freely  sold  in  the  United  Kingdom.  That 


BRITISH  INDUSTRIAL  INEFFICIENCY  521 


could  not  possibly  be  done  if  American  wholesale  prices 
were  considerably  higher  than  British  wholesale  prices, 
especially  as  there  is  only  little  American  dumping.  On 
the  other  hand,  American  retail  prices  were  before  the 
War  higher  than  British  retail  prices.  This  happened 
because  longer  distances  and  higher  wages  of  shop  assis¬ 
tants  make  retailing  in  the  United  States  more  expensive 
than  in  the  United  Kingdom. 

Let  us  now  study  the  table  a  little  more  closely.  The 
comparisons  given  in  the  four  columns  are  of  two  kinds : 
they  are  in  respect  of  “  Gross  Output  ”  and  of  “  Net  Out¬ 
put.”  Now,  the  question  will  be  asked:  “What  consti¬ 
tutes  gross  output  and  what  net  output  ?” 

The  two  columns  which  compare  gross  output  in  the 
United  States  and  Great  Britain  give  the  actual  wholesale 
value  of  the  products  turned  out  by  the  British  and 
American  worker  per  year.  For  instance,  the  average 
worker  in  the  clothing  industry  produced  £484  worth  of 
clothing  in  the  United  States  and  only  £158  worth  of 
clothing  in  the  United  Kingdom.  Now,  it  stands  to  reason 
that  the  American  output  per  worker  would  be  far  greater 
than  the  British  output  per  worker  if  the  American  cloth¬ 
ing  industry  employed  more  expensive  cloth  than  the 
British  clothing  industry,  or  if  the  American  boot  and 
shoe  industry  used  more  expensive  leather,  etc.  That 
difference  in  the  cost  of  materials  which  may  falsify  the 
comparison  between  British  and  American  output  per 
man  can  easily  be  eliminated. 

If  we  wish  to  find  out  how  much  a  worker  actuallv 
produces  by  the  work  of  his  hands,  we  must,  of  course, 
deduct  from  the  value  of  his  output  in  clothes,  boots, 
etc.,  the  value  of  the  materials  used  by  him  and  all  the 
incidental  expenses  of  the  factory,  such  as  rent,  rates  and 
taxes,  fuel,  wear  and  tear  of  machinery,  cost  of  manage¬ 
ment,  etc.,  for  all  these  are  contained  in  the  wholesale 


522  BRITISH  INDUSTRIAL  INEFFICIENCY 


cost  of  the  goods  produced.  All  these  items  are  given 
both  in  the  British  and  American  Census  of  Production, 
having  been  furnished  by  the  manufacturers.  If  we 
deduct  from  the  gross  output  per  worker  the  cost  of  all 
the  materials  used  and  all  the  other  items  which  are 
usually  called  overhead  expenses,  we  find  out  the  actual 
value  which  the  worker  has  produced  by  his  personal 
work.  This  actual  value  produced  by  the  worker  by  his 
exertion  is  what  is  called  the  net  output.  To  sum  up, 
gross  output  gives  the  value  of  the  goods  produced  per 
worker,  and  net  output  states  the  actual  value  of  the 
worker’s  own  labour. 

Comparison  of  Columns  1  and  2  shows  that  the  Anerican 
worker  produces  at  wholesale  prices  nearly  three  times  as 
much  gross  as  his  British  colleague.  In  other  words, 
he  produces  nearly  three  times  as  many  boots,  suits  of 
clothing,  etc.,  per  year.  Comparison  of  Columns  3  and 
4  shows  that  the  American  worker  does  also  about  three 
times  as  much  work  as  his  British  colleague,  because  he 
produces  nearly  three  times  as  much  net  as  the  British 
worker.  If  we  leave  out  of  account  the  cost  of  all  the 
materials  used  and  all  the  overhead  expenses  of  the 
factory,  American  production  is  still  about  three  times 
as  great  as  British  production  per  worker. 

It  appears  from  the  reliable  British  and  American 
Government  figures  given  that  the  American  worker 
produces  on  an  average,  both  gross  and  net,  about  three 
times  as  much  as  the  British  worker  employed  in  the 
identical  calling ;  that  a  single  American  worker  produces 
about  as  much  as  do  three  English  workers.  Naturally 
people  will  ask:  “  How  is  this  possible  ?  How  do  the 
Americans  achieve  this  ?  Do  they  work  so  much  harder 
than  English  workmen,  or  do  they  work  much  longer 
hours  ?” 

In  1907-1909  working  hours  were  almost  identical  in 


BRITISH  INDUSTRIAL  INEFFICIENCY  523 


the  two  countries.  In  some  industries  the  Americans 
worked  longer  hours  and  in  some  they  worked  shorter 


Total  Horse-Power 
employed. 

Horse-Power  per 
1,000  Wage-earners. 

United 
States 
in  1909. 

United 
Kingdom 
in  1907. 

United 
States 
in  1909. 

United 
Kingdom 
in  1907. 

Boots  and  shoes  . . 

96.301 

20,171 

486 

172 

Cardboard  boxes  . . 

23,323 

2,288 

590 

114 

Butter  and  cheese 

101,379 

11,372 

5,507 

1,477 

Cement 

371,799 

60.079 

13,873 

3,195 

Clothing  . . 

65,019 

17,837 

165 

45 

Cocoa,  chocolate, 

46,463 

19,898 

980 

346 

and  confectionery 

Cotton  goods 

1,296,517 

1,239,212 

3,433 

2,214 

Clocks  and  watches 

14,957 

550 

628 

125 

Cutlery  and  tools . . 

62,294 

5,248 

2,069 

420 

Dyeing  and  finish- 

ing  textiles 

107,746 

190,252 

2,449 

1,949 

Gasworks  . . 

128,350 

33,618 

3,469 

687 

Firearms  and  am- 

munition 

17,840 

2,619 

1,214 

595 

Gloves 

2,889 

509 

256 

113 

Hats  and  caps 

23,524 

5,142 

588 

181 

Hosiery 

103,709 

7,784 

804 

163 

Leather  tanning  and 

dressing . , 

148,140 

22,609 

2,389 

847 

Lime 

27,671 

10,867 

1,991 

701 

Brewing  and  malt- 

ing 

347,726 

64,636 

6,209 

937 

Matches 

6,224 

1,591 

1,729 

408 

Paint,  colours,  and 

varnish 

56,162 

14,575 

4,012 

1,375 

Paper 

1,304,265 

172,224 

15,846 

4,201 

Pens  and  pencils  . . 

4,261 

1,450 

710 

241 

Printing  and  pub- 

lishing  . . 

297,763 

38,611 

1,154 

1,133 

Railway  carriages 

and  waggons  . . 

97,797 

30,407 

2,274 

1,126 

Silk 

97,947 

18,867 

989 

608 

Soap  and  candles . . 

29,159 

16,938 

2,160 

1,092 

hours  than  Englishmen.  On  the  whole,  and  taking  all 
trades  together,  there  was  little  difference  between  the  two 


524  BRITISH  INDUSTRIAL  INEFFICIENCY 


countries.  America’s  extraordinary  superiority  in  pro¬ 
duction  is  therefore  not  due  to  longer  hours,  nor  is  it  due 
to  harder  work. 

The  greater  production  is,  the  lighter  is  the  work.  It 

is  infinitely  easier  to  excavate  100  tons  of  earth  with  a 

steam  shovel  than  10  tons  by  hand.  It  is  infinitely 

easier  to  direct  a  heavv  steam  hammer  than  to  wield  a 

%/ 

light  hand  hammer.  America’s  vast  superiority  in 
manufacturing  production  per  man  is  due  to  various 
factors,  among  which  two  are  of  particular  importance. 
These  are,  firstly  better  machinery,  and  secondly  greater 
engine  power. 

Everybody  knows  nowadays  that  the  Americans  use 
much  more  automatic  and  other  labour-saving  machinery 
and  devices  than  Englishmen,  but  it  is  not  generally  known 
that  the  Americans  use  a  great  deal  more  engine  power 
as  well.  The  fact  that  America’s  vast  superiority  in 
production  is  due  not  only  to  the  employment  of  more 
perfect  machinery,  but  also,  and  particularly,  to  the 
possession  of  far  more  power  with  which  to  run  these 
superior  machines,  is  clearly  proved  by  the  following 
figures.  They  also  have  been  extracted  from  the  British 
and  American  Census  of  Production,  and  they  should  be 
studied  with  attention.  (See  p.  523.) 

If  we  now  add  up  the  figures  given  by  the  British  and 
American  Censuses  for  the  twenty-six  industries  men¬ 
tioned,  we  arrive  at  the  following  very  interesting  and 
significant  result : 


Horse-Power  used  in  the  Twenty-six  Trades 

PREVIOUSLY  ENUMERATED. 


No.  of 
Workers. 

Horse -To  wer 
used. 

Horse-Tower 
per  1,000 
Workers. 

United  States 

United  Kingdom  . .  j 

1,982,777 

1,699,572 

4,779,225 

2,009,354 

2,409 

1,182 

BRITISH  INDUSTRIAL  INEFFICIENCY  525 


The  figures  given  show  that  per  thousand  workers  the 
American  industries  use  considerably  more  than  twice 
as  much  horse  power  than  do  the  corresponding  British 
industries.  In  other  words,  the  American  industries  have 
a  better  mechanical  outfit  than  the  British  industries. 
They  use  machines  of  a  superior  kind.  In  addition,  they 
set  these  superior  machines  in  motion  with  greater  power. 
It  stands  to  reason  that  a  thousand  workers  can  produce 
more  with  superior  machines  driven  with  great  power 
than  a  thousand  equally  able  workers  who  use  inferior 
machines  driven  by  less  than  half  the  power. 

In  the  past  Great  Britain  was  the  workshop  of  the  world. 
In  the  past  the  factories  of  the  United  Kingdom  pro¬ 
duced  far  more  goods  than  the  factories  of  any  other 
country.  The  wealth  of  modern  nations  is  created  chiefly 
in  the  factories  and  in  the  workshops,  not  in  the  mines 
and  in  the  fields.  Even  in  the  United  States  the  wealth 
and  income  created  in  the  factories  is  far  greater  than  the 
wealth  and  income  created  by  their  gigantic  agriculture 
and  their  enormous  mining  industries.  The  production 
of  the  American  factories  was  in  1909-10,  according  to 
reliable  official  figures,  twice  as  large  as  the  production 
of  agriculture,  mining,  forestry,  and  fishery  combined. 

All  the  figures  given  in  the  preceding  pages,  as  well  as 
those  contained  in  some  of  the  previous  chapters,  tell 
the  identical  tale.  All  confirm  the  fact  that  the  average 
American  worker  does  about  as  much  productive  work 
as  three  Englishmen.  That  is  a  very  serious  fact,  which, 
of  course,  has  very  serious  consequences  to  the  British 
nation,  and  to  the  British  workers.  Production  means 
wealth,  and  wealth  means  production.  High  production 
enriches  nations  and  the  individuals  of  which  they  are 
composed,  and  brings  about  progress  and  advancement. 
That  may  be  seen  by  the  example  of  the  United  States 
and  of  the  American  people,  whose  progress  and  pros- 


526  BRITISH  INDUSTRIAL  INEFFICIENCY 


perity  are  phenomenal.  On  the  other  hand,  low  produc¬ 
tion  means  low  consumption,  means  backwardness  and 
stagnation,  means  dissatisfaction,  indigence,  or  even 
poverty,  for  States  and  their  citizens.  That  is  proved  by 
the  example  of  Spain  and  China. 

The  Faults  of  the  Workers. 

Readers  who  are  interested  in  the  problem  of  produc¬ 
tion  will  no  doubt  ask:  “  How  is  it  that  a  single  American 
worker  produces  as  much  wealth — for  useful  and  necessary 
goods  are  the  only  true  wealth — as  do  three  Englishmen  ? 
How  is  it  that  so  much  British  labour  is  wasted  in  un¬ 
scientific  and  unsatisfactory  production  ?  Why  are  the 
United  States  so  far  ahead  of  Great  Britain  in  the  use  of 
the  best  labour-saving  machinery  and  in  the  use  of  an 
abundance  of  power  with  which  to  drive  it  ?  Is  it  the 
fault  of  the  employers  or  of  the  employed,  or  are  both 
employers  and  employed  equally  responsible  for  England’s 
extraordinary  inferiority  in  mechanical  outfit  and  in 
output  ?” 

The  responsibility  for  the  lowness  of  British  production 
per  worker  is  shared  by  the  employers  and  the  workers. 

Let  us  proceed  with  absolute  impartiality.  Let  us  first 
deal  with  the  attitude  .and  the  mistakes  of  the  workers, 
and  then  with  the  attitude  and  the  mistakes  of  the 
employers. 

The  fact  that  the  British  workers  have  hitherto  striven, 
not  to  increase,  but  to  restrict  output,  is  notorious.  It  is 
so  notorious  that  it  has  been  commented  upon  by  many 
highly  competent  observers,  and  particularly  by  the  most 
authoritative  industrial  experts  of  the  United  States. 
The  views  expressed  by  them  will  be  found  in  the  chapter 
on c’  The  Inefficiency  of  British  Industrial  Production — I.” 
In  the  United  States  the  limitation  of  output  is  little 
known.  In  that  country  employers  and  employed  are 


BRITISH  INDUSTRIAL  INEFFICIENCY  527 


agreed  that  high  individual  production  is  of  the  greatest 
benefit  to  the  workers,  to  the  employers,  and  to  the 
nation  as  a  whole. 

The  war  has  stirred  up  masters  and  men.  Employers 
and  employed  have  begun  to  recognise  that  national  and 
individual  prosperity  depend,  in  the  first  instance,  upon 
high  individual  production;  that  masters  and  men  must 
bestir  themselves  and  do  thefr  best.  After  all,  the  most 
precious  possession  of  a  nation  is  the  productive  labour 
of  the  people,  and  the  greatest  waste  which  a  nation  can 
indulge  in  consists  in  wasting  labour,  in  making  three 
men  do  work  which  one  man  can  do;  in  producing  one 
pair  of  boots  for  every  three  which  might  be  served  out; 
in  building  one  house  for  every  three  that  might  be 
constructed. 

While  the  War  was  still  in  progress  the  British  Board 
of  Trade  and  the  Ministry  of  Reconstruction  appointed 
a  number  of  Committees,  which  were  to  report  on  the 
present  position  and  the  future  development  of  the 
principal  industries.  These  Committees  were  composed 
of  leading  experts  in  the  various  trades.  Hence  their 
findings  are  of  considerable  value.  Some  of  the  reports 
which  have  been  issued  contain  complaints  as  to  the 
deliberate  limitation  of  output  on  the  part  of  the  workers. 
For  instance,  in  the  Report  on  the  Engineering  Trade 
(Cd.  9073),  we  read,  on  p.  13: 

Nearly  every  employer  who  appeared  before  us  had  the 
same  story  to  tell.  Whilst  alleging  that  the  British 
mechanic  stands  second  to  none  of  the  mechanics  of  the 
world — that  his  skill,  initiative,  and  adaptability  enable 
him  readily  to  cope  with  all  engineering  manufacturing 
difficulties — each  employer  in  turn  complained  of  two 
things.  The  first  complaint  was  that  the  workman 
deliberately  restricts  his  output  below  that  which  repre¬ 
sents  a  reasonable  day’s  work,  and  that  this  deliberate 
restriction  does  ultimately  have  a  serious  effect  on  his 


528  BRITISH  INDUSTRIAL  INEFFICIENCY 


character  and  makes  him  physically  incapable  of  pro¬ 
ducing  a  reasonable  day’s  work,  through  habit  which  this 
restriction  engenders.  .  .  . 

The  second  complaint  was  that  the  restrictions  imposed 
by  trade-union  rules  class  as  skilled  work  (a  definition 
which  can  be  determined  by  the  rate  of  pay)  that  which 
is  in  fact  unskilled  work.  These  two  points  seem  to 
include  the  main  difficulties  with  which  employers  have 
to  contend,  and  which  present  a  most  grave  aspect  if 
they  are  to  continue  after  the  War,  in  face  of  the  great 
national  problems  which  will  then  demand  solution.  .  .  . 

We  are  satisfied  that  both  these  allegations  are  founded 
on  fact.  On  the  other  hand,  we  recognise  that  from  the 
view-point  of  labour  there  is  something  to  be  said.  As 
regards  the  restriction  of  output,  there  seems  to  have  been 
in  certain  quarters  a  belief  that  there  is  only  a  certain 
amount  of  work  to  be  done,  and  that  it  is  necessary  that 
this  work  should  be  spread  over  the  largest  number  of 
workmen  possible.  ...  We  recognise  that  the  basis  of 
these  beliefs  is  loyalty  to  the  trade  unions  to  which  they 
belong  and  to  their  fellow- workmen.  It  has  altogether 
an  admirable  side.  On  the  other  hand,  it  is,  we  think, 
a  fallacy  to  believe  that,  within  practicable  limits,  the 
demand  for  engineering  outputs  is  a  limited  quantity. 

The  trade  unions  discourage  payment  by  the  piece,  as 
it  increases  production.  The  Report  states: 

In  order  to  enable  the  expert  workman  to  earn  during 
the  best  years  of  his  life  the  maximum  possible  return, 
it  would  seem  that  piece  work,  or  a  bonus  system  on  time 
work,  ought  to  be  the  foundation  as  far  as  possible  of  all 
employment. 

The  trade  unions  have  in  the  past  been  very  reluctant 
to  admit  piece  rates.  Indeed,  even  now,  some  of  the 
unions  forbid  their  members  to  accept  piece  rates  where 
these  have  not  previously  been  in  force,  and,  where  piece 
work  has  been  started,  the  members  are  asked  to  dis¬ 
courage  it  as  much  as  possible.  It  has  also  been  evidenced 
to  us  that  cases  have  occurred  wherein,  should  the  men 
earn  more  than  time  and  a  third,  they  have  been  fined  by 
their  union.  .  .  . 


BRITISH  INDUSTRIAL  INEFFICIENCY  529 


Of  course,  payment  by  piece  rate  should  be  fair,  and, 
as  a  rule,  is  fair.  The  Report  states : 

We  are  glad  to  think  that  few  employers  of  any  standing 
have  recourse  to  a  system  of  cutting  piece  rates,  a  system 
which  was  prevalent  in  the  old  days  to  such  an  extent, 
and  without  justification,  that  piece  work  was  brought 
into  disrepute.  Indeed,  certain  employers’  associations 
have  regulations  against  this  practice.  We  are  of 
opinion  that  a  piece  rate  once  fixed,  and  proved  to  be 
reasonable  after  fair  trial,  ought  not  to  be  disturbed, 
except  by  adjustment  through  agreed  rise  and  fall  of 
wages  or  in  every  special  circumstance— such  as  the 
introduction  of  an  improved  machine  or  method  of 
producing  the  same  article. 

The  Reports  of  various  other  Committees  contain 
similar  statements  with  regard  to  the  limitation  of  output. 
For  instance,  the  Report  of  the  Departmental  Committee 
on  “  The  Position  of  the  Iron  and  Steel  Trades  after  the 
War”  (Cd.  9071)  stated,  under  the  heading  “  Iron 
Castings  (Light  Castings),”  on  p.  11: 

The  trade  suffers  considerably  from  restriction  of  output 
by  employees,  and  it  is  well  known  that,  although 
foundry  workers  earn  higher  wages  in  the  United  States, 
the  wages  cost  of  certain  standard  articles  produced  in 
both  countries  is  considerably  lower  in  the  United  States 
(because  of  larger  output  per  worker). 

With  regard  to  wire  and  wire  nails,  we  read  on  p.  13 : 

The  manufacture  of  wire  and  wire  nails  is  hampered  in 
this  country  by  the  rules  of  the  Workmen’s  Society  of 
Wire-Drawers  that  no  man  should  take  charge  of  more 
than  two  wire-drawing  blocks,  whereas  in  Germany  and 
America  no  limit  is  placed  upon  the  number  of  blocks  an 
individual  workman  may  attend. 

On  p.  27  we  read,  under  the  heading  “  Labour 

A  committee  of  managers,  foremen,  and  workmen 
should  be  formed  in  each  works  to  discuss  and  advise  as 
to  distribution  of  labour  and  restriction  of  output.  The 


530  BRITISH  INDUSTRIAL  INEFFICIENCY 


policy  of  restriction  is  strongly  discountenanced  by  some 
of  the  leaders,  but  there  is  no  doubt  that  deliberate 
restriction  is  practised  by  individual  workmen  and  groups 
of  workmen  in  conformity  with  the  policy  of  their  unions, 
some  of  which  oppose  payment  by  results  as  being 
inapplicable  to  their  particular  trades. 

If  the  British  iron  and  steel  industries  as  a  whole  are  to 
regain  their  place  in  the  trade  of  the  world,  restriction  of 
output  must  be  definitely  abandoned.  Whether  it  be 
used  as  a  policy  to  be  pursued  or  as  an  economic  weapon, 
restriction  of  output  is  economically  unsound  and  is 
utterly  harmful,  not  only  to  the  present  prosperity,  but 
also  to  the  future  progress  of  British  industries. 

The  Report  of  the  Coal  Conservation  Committee  con¬ 
firms  the  views  expressed  by  the  Committees  on  the 
Engineering  Trades  and  on  the  Iron  and  Steel  Trades. 
It  states  in  its  Report,  on  p.  61,  under  the  heading  “  Out¬ 
put  per  Person  employed  Underground  ” : 

One  of  the  most  important  factors  in  the  cost  of  pro¬ 
duction  is  the  annual  output  per  person  employed  under¬ 
ground.  In  this  matter  there  is,  in  the  British  coalfields, 
ground  for  some  misgiving  as  to  the  future  in  view  of  the 
fact  that  for  a  considerable  number  of  years  before  the 
War  this  output  has  been  steadily  declining,  notwith¬ 
standing  the  increase  in  the  use  of  mechanical  appliances 
in  the  mines. 

Various  reasons  may  be  advanced  to  explain  the  de¬ 
crease,  but  none  of  them  can  be  regarded  as  adequate. 
The  matter  calls  for  the  most  complete  investigation  on  the 
part  of  the  employers  and  the  representatives  of  labour, 
as  the  future  prosperity  of  the  industry  itself  and  of  the 
industrial  position  of  the  country  generally  depends  very 
largely  upon  a  solution  of  the  problem  being  found. 

Where  there  is  any  unnecessary  restriction  of  output, 
this  should  be  removed,  and  if  such  restriction  is  in  any 
degree  due  to  a  feeling  of  insecurity  on  the  part  of  the 
workmen,  and  a  belief  that  if  they  put  forth  a  special 
effort  to  increase  production  they  will  suffer  a  reduction 
in  their  wages  rates,  a  strong  effort  should  be  made  to 
remove  any  justification  which  may  exist  for  such  a  belief. 


BRITISH  INDUSTRIAL  INEFFICIENCY  531 


The  interests  of  the  employer  and  his  workmen  appear 
to  be  identical  in  this  important  matter,  and  the  fullest 
co-operation  between  them  is  required  for  the  attainment 
of  this  end.  It  is  only  by  increased  production  per  head 
of  the  persons  employed  that  our  trade  position  can  be 
maintained  and  that  improved  conditions  of  employment 
can  be  secured,  and  this  ought  to  be  recognised  by  work¬ 
men  as  well  as  by  employers. 

The  Faults  of  the  Employers. 

While  the  workers  have  kept  back  production  in  the 
supposed  interest  of  labour  by  their  deliberate,  deter¬ 
mined,  and  persistent  policy  of  restricting  output,  many 
employers  have  prevented  the  introduction  of  the  most 
modern  and  most  efficient  methods  of  production,  either 
in  the  hope  of  benefiting  themselves  or  from  sheer  torpor 
and  lethargy.  Some  employers  were  content  to  continue 
producing  with  their  grandfather’s  machines  and  accord¬ 
ing  to  their  grandfather’s  methods,  saying  to  themselves : 
“  What  was  good  enough  for  my  grandfather  is  good 
enough  for  me.”  Some  manufacturers,  feeling  bored  with 
business,  left  the  direction  of  affairs  to  managers  who 
merely  carried  on  in  the  old  way.  Some  were  foolish 
enough  to  disdain  new  inventions  and  improvements, 
and  refused  to  take  note  of  them.  Some  thought  it  good 
business  to  retain  their  old  labour-wasting  machinery, 
as  they  did  not  realise  that  nothing  is  more  wasteful  than 
economy  on  labour-saving  plant. 

While  one  must  not  close  one’s  eyes  to  the  faults  of  the 
employers,  it  must,  of  course,  not  be  forgotten  that  many 
manufacturers  did  not  care  to  modernise  their  installa¬ 
tion  because  they  feared  that  the  introduction  of  costly 
labour-saving  improvements  would  result,  not  in  an 
increase  in  output,  but  in  trouble  with  their  workers; 
that  the  improvement  of  their  mechanical  outfit  and 
organisation  would  thus  lead  to  a  very  considerable  loss. 


532  BRITISH  INDUSTRIAL  INEFFICIENCY 


The  American  Report  on  Regulation  and  Restriction  of 
Output,  which  has  previously  been  quoted,  stated  with 
excellent  reason : 

The  (British)  employer  is  afraid  that  any  proposed 
change,  of  whatever  nature,  will  result  in  friction  and 
controversy  with  his  workmen.  He  fears  that,  should  he 
reorganise  his  shop  with  expensive  and  more  modern 
machinery,  his  employees  will  either  refuse  to  work  the 
new  machines;  or,  not  being  familiar  with  the  power  of 
the  machinery,  would  demand  a  rate  of  pay  which  would 
more  than  absorb  the  profits  from  its  use;  or,  suspecting 
that  they  were  not  getting  a  sufficient  rate  of  pay  on  the 
machine,  would  restrict  the  output  so  as  to  make  the 
venture  unprofitable. 

Many  instances  might  be  given  of  workmen  producing 
with  new  and  exceedingly  expensive  machinery  exactly 
as  much  as  they  did  with  the  old  labour-wasting  machinery 
which  had  been  scrapped.  Such  experiences,  of  course, 
deterred  manufacturers  improving  their  mechanical  out¬ 
fit. 

The  various  Reports  which,  towards  the  end  of  the  War, 
were  issued  by  the  Board  of  Trade  and  the  Ministry 
of  Reconstruction  dwell  unsparingly  on  the  sluggish 
conservatism  and  lack  of  initiative  of  many  employers, 
the  antiquated  organisation  of  industries,  and  the  general 
inefficiency  of  the  mechanical  outfit  and  the  methods  of 
production — faults  which  the  employers  ought  to  have 
remedied.  For  instance,  the  Report  on  the  Engineering 
Trades  after  the  War  stated  on  p.  9,  under  the  heading 
“  German  and  British  Works  compared: 

There  has  been  generally  an  absence  of  totally  new 
works  with  an  economic  lay-out.  Whilst  the  country 
can  point  to  many  works  of  the  highest  class,  with  the 
most  modern  equipment  worked  at  the  highest  efficiency, 
there  can  be  no  doubt  that  many  of  our  older  works  are 
manufacturing  at  costs  which  could  be  greatly  reduced 


BRITISH  INDUSTRIAL  INEFFICIENCY  533 


if  the  works  as  a  whole  were  on  a  larger  scale,  well  planned 
and  equipped  with  plant,  and  therefore  capable  of  being 
worked  in  the  most  efficient  and  economical  manner. 
In  one  instance  brought  to  our  notice  it  was  only  by  taking 
a  bold  plunge  and  building  works  specially  suited  to  the 
production  of  the  article  made,  previously  a  German 
monopoly,  that  success  was  achieved.  This  remodelling 
of  works  under  present  conditions  does  not  seem  generally 
possible,  whilst  in  many  cases  the  energy  and  capital 
are  lacking  to  adopt  the  American  system  of  scrapping 
old  works  in  favour  of  a  total  reconstruction  on  the  most 
modern  lines.  .  .  . 

The  further  comment  arises  that  with  many  firms  of 
manufacturers,  carrying  on  relatively  small  businesses, 
management  and  establishment  charges  are  necessarily 
much  higher  than  they  need  be  if  the  firms  were  working 
in  larger  units. 

On  p.  10  of  the  same  Report  we  read,  under  the  heading 
“  The  British  Manufacturer  ” : 

We  have,  as  previously  indicated,  been  much  impressed 
in  the  course  of  our  investigation  by  the  very  large 
number  of  relatively  small  firms  that  exist — each  with  a 
separate  organisation,  separate  establishment  charges, 
separate  buying  and  selling  arrangements,  and  each 
producing  a  multiplicity  of  articles.  Some  of  them 
seemed  to  take  a  special  pride  in  the  number  of  things 
they  turn  out;  whilst  few  of  them  seemed  to  be  willing 
to  contemplate  buying  at  a  cheaper  price  a  component 
part  from  a  rival  manufacturer,  even  if  they  were  per¬ 
mitted  to  do  so  by  that  rival. 

A  system  of  exclusiveness  and  aloofness  marked  the 
engineering  trade  before  the  War.  Each  manufacturer 
keeps  his  own  secrets,  and  if  he  has  any  special  processes 
or  special  method  of  manufacture,  he,  somewhat  natur¬ 
ally,  is  desirous  of  retaining  that  process  for  himself  rather 
than  of  adding  it  to  the  common  manufacturing  know¬ 
ledge  of  the  country.  The  result  of  many  firms  being 
employed  upon  producing  a  large  number  of  articles  in 
common  use  is  the  causing  of  confusion  in  the  types  of 
articles  produced,  so  that  no  two  manufacturers  seem 


534  BRITISH  INDUSTRIAL  INEFFICIENCY 


intentionally  to  produce  precisely  the  same  article.  Each 
one  claims  some  special  merit  for  his  own. 

Continuing,  the  Report  states,  under  the  heading  “  The 
German  and  American  Manufacturer 

“The  system  in  Germany  and  the  United  States  is 
widely  different.  There  manufacturers  work  in  as  large 
units  as  possible.  The  number  of  patterns  produced  in 
each  works  is  strictly  limited,  and  the  sale  of  the  articles 
manufactured  is  pushed  throughout  the  trade.  One 
manufacturer  may  specialise  on  a  certain  article  forming 
a  part  only  of  a  completed  product,  and  other  manu¬ 
facturers  requiring  that  part  will  buy  it  from  him  and  not 
make  it  themselves. 5 ’ 

On  p.  II  we  read,  under  the  heading  “  Specialisation 
of  Output”: 

In  this  country  we  have,  except  in  the  cycle  trade, 
practically  no  one  to  compare  with  the  component 
specialist  who  exists  throughout  the  United  States. 
There  is  consequently  a  very  large  amount  of  unnecessary 
stock  of  different  patterns  carried  throughout  the  country, 
and  made  at  a  higher  cost  than  it  is  necessary.  Workmen 
are  constantly  diverted  from  the  manufacture  of  one 
article  to  the  manufacture  of  another;  much  time  is 
thereby  wasted,  and  the  change  over  from  machines 
entails  a  considerable  amount  of  machinery  standing  idle 
when  the  special  article  for  which  that  tool  is  required 
is  not  at  the  moment  being  produced.  This  is  a  wasteful 
and  costly  process,  which  limits  output  and  therefore 
decreases  possibility  of  profit  and  high  wages,  whilst  the 
absence  of  much  repetition  work  prevents  a  system  of 
payment  by  piece  being  largely  introduced. 

The  witnesses  admit  that  the  present  system  of  pro¬ 
duction  in  the  engineering  trades  can  easily  be  improved, 
and  undoubtedly  since  the  War  there  has  been  a  con¬ 
siderable  movement  towards  standardising  patterns,  the 
specialisation  of  output,  the  co-ordination  of  produc¬ 
tion,  and  towards  the  communication  to  each  other  by 
hitherto  rival  manufacturers  of  improved  processes  and 
methods. 


BRITISH  INDUSTRIAL  INEFFICIENCY  535 


Producing  on  the  largest  scale  in  scientifically  planned 
and  perfectly  laid  out  modern  works  with  the  best  and 
most  powerful  machinery,  and  by  means  of  the  highest 
specialisation  and  standardisation,  enables  a  manu¬ 
facturer  to  produce  excellent  goods  in  gigantic  quantities 
at  an  incredibly  low  price  by  means  of  extraordinarily 
highly  remunerated  labour.  The  Ford  motor-car  is  a 
brilliant  example  of  production  carried  on  in  this  manner. 
Mr.  Henry  Ford  has  been  a  public  benefactor,  not  only 
by  producing  a  cheap  and  popular  motor-car- — I  think 
he  alone  turns  out  eveiy  year  more  motor-cars  than  all 
the  nations  of  Europe  combined — but  also  by  teaching 
the  world  how  to  produce  cheaply  by  means  of  the 
highest-paid  labour.  Naturally  his  methods,  which  are 
likely  to  revolutionise  industry,  have  attracted  the 
attention  of  those  men  who  have  investigated  the  present 
position  and  future  prospects  of  the  British  industries. 
We  read,  for  instance,  in  the  Report  on  the  Engineering 
Trades  Avith  regard  to  the  Ford  motor-car : 

Ford  motor-cars  in  this  country  before  the  War  were 
sold  at  a  retail  price  of  £125.  It  is  commonly  known  that 
the  cost  of  these  cars  at  the  factory  in  the  States  is  under 
£40,  without  including  overhead  charges.  The  car  itself 
is  sold  in  the  States  at  about  £80.  The  difference  between 
the  price  of  sale  in  the  States  and  the  price  here  leaves  an 
abundant  margin  for  freight  and  commission.  The 
manufacture  of  Ford  cars  is  of  itself  a  speciality.  It 
stands  alone,  both  in  its  cheapness  and  its  huge  output. 
No  other  manufacturer,  either  in  the  States  or  elsewhere, 
attempts  to  turn  out  a  car  at  anything  like  this  price. 
The  finish  is  rough,  but  the  materials  employed  are 
excellent.  Other  cars,  cheap,  but  better  finished,  come 
into  this  country  from  the  States,  the  low  price  being 
apparently  the  result  of  large  production  on  standardised 
lines.  There  was  not  before  the  War  in  this  country  any 
known  manufacturer  who  was  turning  out  a  five-seated 
car  at  £200  retail. 

British  manufacturers,  apparently  without  exception, 


536  BRITISH  INDUSTRIAL  INEFFICIENCY 


have  aimed  at  producing  a  much  better  finished  car, 
and  have  paid  less  attention  as  yet  to  the  wants  of  the 
man  who  does  not  care  for  appearance  provided  that  the 
car  will  run,  nor  have  they  been  prepared  to  sink  the 
very  large  capital  in  machinery  and  stock  which  is 
absolutely  necessary  for  the  production  of  a  very  cheap 
car. 

The  motor-car  trade  in  this  country  is  still  not  fully 
developed,  and  its  selling  expenses  are  still  abnormally 
high,  and  until  the  car  takes  a  normal  place  as  an  ordinary 
trade  product  it  will  naturally  be  open  to  severe  competi¬ 
tion  from  abroad.  A  car  which  can  be  sold  at  £80  in 
the  States  can  hardly  be  kept  out  of  this  country  except 
by  direct  prohibition. 

Other  Government  Reports  confirm  the  views  expressed 
in  the  Engineering  Report.  We  read,  for  instance,  in  the 
Report  of  the  Committee  on  Commercial  and  Industrial 
Policy  after  the  War  (Cd.  9035),  published  in  1918,  on 

p.  11: 

The  relatively  stationary  condition  of  the  British  iron 
and  steel  industry  in  respect  of  production,  and  its  de¬ 
clining  position  in  the  world’s  trade,  are  ascribed  by  the 
Departmental  Committee  on  the  Iron  and  Steel  Trades 
in  part  to  the  deficiency  of  the  United  Kingdom’s  natural 
resources  of  iron  ore,  but  primarily  to  the  more  modern 
character,  better  organisation,  and  greater  efficiency  of 
the  German  and  American  industries  in  respect  alike  of 
the  acquisition  and  development  of  supplies  of  raw 
materials,  of  production  and  of  distribution.  The  Com¬ 
mittee  remark  that  the  American  and  German  iron  and 
steel  industries  are  of  relatively  recent  growth,  and  have 
throughout  been  organised  for  large-scale  production, 
and  small  installations  held  and  worked  by  individual 
owners  are  comparatively  unknown.  The  individualism 
of  the  British  character  has  often  led  the  iron  and  steel 
manufacturer  to  prefer  to  retain  personal  control  over 
a  small  and  relatively  inefficient  works  rather  than  pool 
his  brains  and  capital  to  the  greater  ultimate  advantage 
of  the  industry. 

The  iron  and  steel  manufacturers  of  Germany  and 


BRITISH  INDUSTRIAL  INEFFICIENCY  537 


America  have  developed  their  industries  on  an  immense 
scale,  aiming  at  the  production  of  large  quantities  of 
uniform  articles  rather  than  at  variety  of  output.  Large 
units  specially  designed  for  cheap  production  have  been 
laid  down.  On  the  other  hand  expansion  in  the  United 
Kingdom  has  generally  meant  the  remodelling  and  exten¬ 
sion  of  existing  works.  Further,  the  efficiency  of  the  iron 
and  steel  plants  of  the  United  Kingdom  is  stated  to  be, 
as  a  result  of  several  distinct  factors,  very  far  behind  that 
of  their  American  and  German  conpetitors,  the  production 
of  small  units  being  naturally  less,  the  expenditure  of 
labour  greater,  and  the  appliances  frequently  inadequate. 

Attention  is  called  by  the  Iron  and  Steel  Trades  Com¬ 
mittee  to  the  fact  that  the  production  of  pig-iron  per 
blast  furnace  per  annum  in  the  United  Kingdom  ranged 
in  1915  in  England  and  Wales  from  33,300  tons  in  the 
Lincolnshire  and  Leicestershire  districts  to  65,000  tons 
in  South  Wales,  whilst  in  the  United  States  in  the  same 
year  the  range  was  from  80,000  tons  in  Alabama  to 
135,900  tons  in  Illinois.  Corresponding  figures  for  Ger¬ 
many  are  not  available  for  later  than  1911,  but  in  that 
year  the  range  was  from  45,700  tons  in  Lorraine  and 
Luxemburg  to  67,400  in  Rhineland- Westphalia,  and 
there  is  no  doubt  that  these  figures  had  been  very  con¬ 
siderably  increased  prior  to  the  outbreak  of  War. 

Production  in  Germany  and  the  United  States  is  con¬ 
trolled  by  very  powerful  combinations — in  the  former 
country  by  the  Stahhverksverband,  a  combination  pri¬ 
marily  for  selling  purposes,  but  regulating  certain  classes 
of  production  and  allocating  orders  amongst  its  consti¬ 
tuent  members  so  as  to  concentrate  and  specialise  pro¬ 
duction  as  far  as  possible ;  whilst  in  the  United  States  the 
United  States  Steel  Corporation — an  actual  consolida¬ 
tion — controls  an  output  of  iron  and  steel  greater  than 
the  whole  output  of  the  United  Kingdom,  and  co-operates 
with  other  powerful  interests. 

The  views  expressed  in  the  Report  quoted  as  to  the 
great  superiority  of  the  methods  employed  in  the  United 
States,  and  also  in  Germany,  for  producing  pig-iron  are 
strikingly  confirmed  in  the  Report  of  the  Departmental 


538  BRITISH  INDUSTRIAL  INEFFICIENCY 


Committee  on  the  Iron  and  Steel  Trades  of  1918 
(Cd.  9071).  for  we  find  on  p.  25  of  that  Report  the 
following  extraordinary  table: 


Production  of  Pig-Iron 

United  Kingdom,  1915. 

Cleveland  .  .  45,800  tons. 

Durham  . .  39,400  ,, 

Cumberland  . .  40,900  ,, 

Lincolnshire  and 
Leicestershire  33,300  ,, 

South  Wales  .  .  65,000  ,, 

Scotland  .  .  15,500  ,, 


per  Furnace  per  Annum. 

United  States,  1915. 

New  York  .  .  120,300  tons. 

Pennsylvania  106,700  ,, 

Alabama  . .  80,000  ,, 

Ohio  ..  ..  117,100  „ 

Illinois  .  .  135,900  ,, 


Production  on  the  largest  scale  enables  America  to 
produce  pig-iron  as  cheaply  as  Great  Britain,  although 
the  wages  of  the  American  workers  are  far  higher  than 
those  of  the  British  workers. 

The  inferiority  of  England’s  mechanical  outfit  may 
also  be  seen  from  the  following  figures,  which  are  taken 
from  p.  7  of  the  Government  Report  on  the  Position  of 
the  Electrical  Trades  after  the  War : 


' 

Great  Britain. 

Germany. 

' 

£ 

£ 

Total  electrical  products 

22,500,000 

60,000,000 

Exports 

7,500,000 

15,000,000 

Imports 

Consumption  of  home-made 

2,933,000 

631,000 

machinery 

15,000,000 

45,000,000 

The  Consequences  of  Insufficient  Output. 

I  think  I  have  shown  with  sufficient  fulness  in  the  pre¬ 
ceding  pages  that  production  per  man  is  approximately 
three  times  as  great  in  the  United  States  as  it  is  in  the 
United  Kingdom;  that  one  American  worker  produces 
about  as  much  as  three  English  workers  engaged  in  the 
identical  occupation,  and  that  England’s  extraordinary 


BRITISH  INDUSTRIAL  INEFFICIENCY  539 


inferiority  in  output  per  worker  is  due  partly  to  the  em¬ 
ployers  and  partly,  or  rather  principally,  to  the  attitude 
of  the  workers  who  have  hitherto  antagonised  the  increase 
of  output.  In  some  industries  output  per  man  has  of 
late  years  increased,  but  it  has  not  increased  sufficiently 
quickly.  In  others  it  has  remained  virtually  stationary, 
and  in  some  it  has  actually  declined,  notwithstanding 
great  mechanical  improvements  made.  A  striking 
instance  of  the  reduced  output  per  worker  is  that  of  the 
coalmining  industry,  regarding  which  the  official  figures 
of  output  per  man,  both  in  England  and  in  the  United 
States,  have  previously  been  given. 

The  relative  lowness  of  output  in  the  United  Kingdom 
is  principally  due  to  the  attitude  of  the  workers.  The 
British  workers  have  hitherto  endeavoured  to  keep  output 
low  by  deliberately  going  slow  and  by  opposing  the 
introduction  of  improved  machinery,  believing  that  a 
greatly  increased  output  was  harmful  to  labour.  They 
argued  that  there  was  so  much  work  to  go  round  and  no 
more;  that  the  introduction  of  improved  machinery  or 
the  acceleration  of  existing  machinery  would  enable  one 
man  to  do  the  work  of  two;  that  therefore  the  doubling 
of  output  all  round  would  lead  to  the  dismissal  of  one-half 
of  the  workers.  That  argument  would  be  perfectly 
correct  if  the  needs  of  man  were  fixed  and  unalterable. 
However,  human  requirements  are  unlimited.  Improve¬ 
ments  in  machinery  and  in  output  may  possibly  lead  to 
momentary  unemployment  in  certain  cases,  but  as  a  rule 
improved  production  leads,  in  the  first  place,  to  the 
cheapening  of  goods,  and  the  cheapening  of  goods  brings 
about  an  enormously  increased  demand.  When  watches 
were  made  by  hand,  only  the  wealthy  few  possessed  a 
watch.  The  introduction  of  watch-making  machinery 
may  have  displaced  a  number  of  skilled  watch-makers 
of  the  old  type,  but  it  has  enormously  increased  employ- 


540  BRITISH  INDUSTRIAL  INEFFICIENCY 


ment  in  the  watch  trade,  and  has  brought  the  factory- 
made  watch  within  reach  of  the  poorest  labourer.  It  is 
not  in  the  interest  of  the  masses  that  the  things  which  they 
require  are  scarce  and  dear,  but  plentiful  and  cheap. 
Restriction  of  output  creates  scarcity  and  dearness. 
Increase  of  output  creates  plenty  and  cheapness. 

Of  course,  organised  labour  can  keep  wages  high  by 
limiting  the  number  of  workers  and  by  limiting  the 
quantity  of  goods  produced.  That  policy  would  be 
immensely  profitable  if  it  was  restricted  to  a  relatively 
small  number  of  workers.  For  instance,  the  boot-makers 
might  conceivably  enrich  themselves  very  greatly  by 
limiting  output  to  such  an  extent  that  a  pair  of  boots 
would  cost  £10.  As  boots  are  a  necessity,  the  whole  of 
the  community  might  be  made  tributary  to  the  boot- 
workers.  However,  other  trades  would,  of  course, 
follow  the  boot-maker’s  example,  and  the  result  would 
be  that  not  only  boots,  but  clothes,  shirts,  food — in  short, 
everything — would  be  scarce  and  dear. 

The  fact  that  the  policy  of  limiting  output  is  extremely 
harmful  to  the  workers,  that  it  impoverishes  them  as 
soon  as  it  becomes  general  can  easily  be  shown  by  an 
example.  Let  us  imagine  that  there  is  a  small  island  out 
of  reach  of  other  countries,  and  let  us  assume  that  it  is 
inhabited  by  eleven  people.  Five  produce  food,  five 
produce  clothing  of  every  kind,  and  the  eleventh  man 
stands  between  the  two  groups.  He  is  the  capitalist. 
He  organises  the  various  activities  of  the  inhabitants, 
and  keeps  a  general  shop.  He  pays  wages  both  to  the 
food-producers  and  to  the  producers  of  clothing.  Wealth 
consists  in  an  abundance  of  useful  and  necessary  things. 
If  the  ten  producers  produce  to  the  utmost,  there  will  be 
plenty  of  food  and  clothing  for  all,  and  consequent 
happiness,  whether  the  wages  paid  to  the  ten  workers  are 
high  or  low.  If  one  of  the  ten  producers  succeeds  in 
obtaining  from  the  capitalist  manager  an  unduly  high 


BRITISH  INDUSTRIAL  INEFFICIENCY  541 


payment  for  his  produce  by  restricting  his  output,  the 
other  nine  workers  will  become  tributary  to  the  tenth 
man.  He  will  flourish  at  the  cost  of  the  rest.  But  if  the 
other  nine  imitate  his  example — and  they  will  probably 
do  so — the  capitalist  may  be  compelled  to  pay  high  wages 
to  all,  but  there  will  be  little  food  and  little  clothing. 
There  will  be  general  poverty  and  dissatisfaction.  Of 
course,  if  the  capitalist  should  obtain  an  undue  share  of 
the  things  produced  by  labour,  the  ten  workers  would 
suffer.  However,  even  the  capitalist  can  consume  only 
a  limited  amount  of  food  and  can  use  only  a  limited 
quantity  of  manufactured  goods. 

Wealth,  rightly  considered,  consists,  not  in  money, 
not  in  coin,  not  even  in  precious  metals,  but  only  in  useful 
and  necessary  articles.  The  value  of  wages  consists  in 
their  purchasing  power.  Their  nominal  amount  is  a 
matter  of  quite  secondary  importance.  High  wages  need 
by  no  means  mean  plenty.  That  may  be  seen  by  the 
example  of  Russia,  where,  under  the  Bolshevik  regime, 
fabulously  high  wages  are  paid.  As  in  the  past  the 
productive  power  of  the  Russian  workers  was  low,  Russian 
wages  also  were  naturally  low.  In  consequence  of  the 
Bolshevik  revolution  the  productive  power  of  the  Russian 
workers  has  been  diminished  very  greatly,  but  their  wages 
have  risen  so  enormously  that  some  men  are  paid  £20  for 
a  single  day's  work.  However,  as  general  production 
has  diminished,  the  higher  money  wages  received  by  the 
Russian  workers  are  naturally  quite  useless  to  them. 

After  all,  a  nation  is  like  a  great  co-operative  society. 

The  workers  are  paid,  not  in  cash,  but  in  goods,  for 
money  is  merely  a  symbol.  Trade  is  a  disguised  form  of 
barter.  A  man  who  produces  boots  is  paid  for  them,  rightly 
considered,  not  with  money,  but  with  a  certain  quantity  of 
clothes,  food,  etc.  Prosperity  consists,  not  in  high  money 
wages,  but  in  high  consumption,  and  high  consumption  is 
obviously  impossible  unless  there  is  high  production. 


542  BRITISH  INDUSTRIAL  INEFFICIENCY 


Those  who  advocate  the  limitation  of  output  frequently 
say  that  that  policy  is  necessary  because  the  home  market 
and  foreign  countries  can  absorb  only  a  certain  quantity 
of  goods;  that  over-production  brings  about  a  fall  in 
prices  and  a  fall  in  wages.  The  workers  in  general  have 
been  suffering  for  years,  not  so  much  from  over-pro¬ 
duction  as  from  under-production,  and  in  consequence 
of  under-production  there  has  also  been  under-consump¬ 
tion.  A  single  American  worker  produces  approximately 
as  much  as  three  English  workers.  Nevertheless,  the 
proportion  of  goods  exported  from  America  is  very  much 
smaller  than  the  proportion  of  goods  exported  from 
England.  It  follows  that  in  the  United  States  consump¬ 
tion  is  three  times  as  great  as  consumption  in  England,  for 
the  goods  produced  are  not  wasted.  Roughly  speaking, 
an  American  buys  three  pairs  of  boots  and  three  shirts 
and  three  chairs,  etc.,  for  every  single  one  bought  by  the 
average  British  worker. 

Plenty  of  necessary  and  useful  goods  betokens  pros¬ 
perity  and  constitutes  prosperity.  Hitherto  British 
workers  have  endeavoured,  not  to  create  an  abundance 
of  useful  and  necessary  goods,  but  to  create  an  artificial 
scarcity  in  the  desire  for  securing  for  themselves  high 
money  wages.  Now,  in  the  United  States,  where  the 
limitation  of  output  is  scarcely  known  and  where  pro¬ 
duction  per  worker  is  about  three  times  as  great  as  pro¬ 
duction  in  England,  wages,  broadly  speaking,  are  approxi¬ 
mately  three  times  as  high  as  in  this  country.  At  least, 
that  was  the  position  up  to  the  outbreak  of  the  War. 
Of  course,  under  normal  conditions  production  and  wages 
go  hand  in  hand.  High  production  means  high  wages, 
and  low  production  means  low  wages.  No  worker  can 
hope  to  earn  more  than  he  produces  net,  whether  he 
works  under  a  capitalistic  regime  or  under  a  Socialist 
form  of  government.  The  employer,  whether  it  be  a 


BRITISH  INDUSTRIAL  INEFFICIENCY  543 


private  person,  or  a  limited  company,  or  the  State,  can 
at  the  utmost  pay  to  the  workman  the  whole  produce 
of  his  labour,  for  the  employer  has  to  provide  the  material 
used  and  the  general  factory  expenses.  Now,  the  net 
output  of  the  British  and  American  workers  compared 
as  follows,  according  to  the  British  and  American  Censuses 
of  Production  : 


Boots  and  shoes 
Cardboard  boxes 
Butter  and  cheese 
Cement 
Clothing- 

Cocoa,  chocolate,  and  confec¬ 
tionery 
Cotton  goods 
Clocks  and  watches 
Cutlery  and  tools 
Dyeing  and  finishing  textiles . . 
Gasworks 

Firearms  and  ammunition 
Gloves 

Hats  and  caps 
Hosiery 

L'  ather  tanning  and  dressing 
Lime 

Brewing  and  malting 
Matches 

Paint,  colours,  and  varnish 
Paper 

Pens  and  pencils 
Printing  and  publishing 
Railway  vehicles  . .  * 

Silk  goods 
Soap  and  candles 


Average  per  head  for  all  the 
industries  enumerated 


[Net  Oid-put  per  Worker  per  Week. 


i 


1 

United  States 
in  1909. 

i 

|  United  Kingdom 
in  1907. 

£ 

s. 

d. 

£ 

s. 

d. 

3 

10 

0 

1 

7 

4 

2 

15 

0 

1 

0 

0 

8 

3 

0 

2 

8 

1 

4 

17 

8 

2 

10 

10 

4 

7 

4 

1 

3 

11 

4 

18 

5 

1 

12 

3 

2 

13 

9 

1 

10 

6 

4 

3 

0 

1 

7 

9 

4 

1 

6 

1 

8 

1 

4 

4 

3 

1 

18 

11 

11 

16 

7 

4 

1 

1 

4 

9 

2 

2 

2 

8 

3 

10 

9 

1 

11 

2 

4 

1 

10 

1 

5 

10 

2 

2 

8 

1 

3 

5 

4 

13 

1 

2 

5 

0 

3 

2 

4 

1 

13 

5 

19 

10 

5 

6 

7 

3 

7 

3 

1 

1 

13 

0 

12 

9 

3 

3 

16 

2 

5 

3 

5 

2 

2 

8 

4 

5 

9 

1 

9 

8 

7 

16 

11 

3 

13 

1 

4 

0 

5 

O 

7 

5 

3 

9 

3 

1 

1 

2 

11 

7 

8 

2 

19 

8 

5 

17 

7 

2 

3 

1 

544  BRITISH  INDUSTRIAL  INEFFICIENCY 


No  employer  of  labour,  whether  it  be  a  private  employer 
or  the  State,  can  possibly  pay  to  a  worker  a  wage  exceed¬ 
ing  the  total  value  of  his  production.  The  foregoing 
table  explains  why,  before  the  War,  British  wages  were 
low  and  American  wages  were  high.  It  explains  why 
American  wages  were  approximately  three  times  as  high 
as  British  wages.  The  British  workers  in  cardboard 
boxes,  whose  net  output  averaged  £1  per  week,  could, 
of  course,  on  an  average,  earn  no  more  than  £1  per  week 
in  wages,  even  if  the  employer,  or  the  State,  gave  them 
the  whole  produce  of  their  labour,  leaving  capital  with¬ 
out  any  return.  The  British  workers  in  boots  and  shoes, 
whose  net  output  averaged  £1  7s.  4d.  per  week,  could, 
of  course,  earn  on  an  average  no  more  than  that  low 
amount.  At  the  same  time,  there  were,  of  course, 
specially  skilled  workers  who,  in  the  cardboard  box  trade, 
would  earn  more  than  £1,  and  in  the  boot  and  shoe  trade 
more  than  £1  7s.  4d.  Still,  the  average  payment  of  the 
workers  in  the  various  trades  cannot  exceed  the  net 
produce  of  their  labour  without  bringing  about  the  bank¬ 
ruptcy  of  the  employer,  whether  it  be  a  private  employer 
or  whether  it  be  the  State.  After  all,  no  man  and  no 
nation  can  consume  more  than  is  produced. 


CHAPTER  XXIV 


LABOUR  UNREST:  ITS  CAUSES  AND  ITS  PERMANENT 

CURE* 

1.  The  Causes 

The  British  industrial  position  is  becoming  exceedingly 
serious  and  disquieting  owing  to  what  is  loosely  called 
the  “  unrest  5J  of  labour.  This  unrest  is  unprecedented 
both  in  extent  and  in  character.  It  has  two  very  dif¬ 
ferent  aspects,  an  economic  and  a  political  one.  On  the 
economic  side  the  workers  have  demanded,  and  are 
demanding,  simultaneously,  vastly  increased  wages  and  a 
great  reduction  in  the  hours  of  labour,  and  apparently 
there  is  no  limit  to  their  claims,  for  every  concession, 
however  far-reaching,  is  treated  by  them  as  merely  a 
stepping-stone  towards  further  and  greater  ones.  On 
the  political  side  the  workers  have  demanded  the  abolition 
of  private  enterprise,  the  confiscation  of  private  wealth, 
the  nationalisation  of  the  most  important  industries,  and 
they  have  more  than  once  threatened  that  they  would 
bring  the  national  industries  and  the  national  life  to  a 
standstill  unless  the  Government  carried  out  at  their 
dictation  and  without  delay  certaiiTlegislative  or  adminis¬ 
trative  measures.  The  intervention  of  labour  in  purely 
political  matters  is  becoming  more  and  more  frequent 
and  its  attitude  more  and  more  dictatorial.  Some  time 
ago  a  member  of  an  important  trade  union  said  to  me: 
“  The  State  ?  Bah!  We  are  the  State.”  The  organised 

*  i 

*  From  tlie  Fortnightly  Review,  July,  1919. 

545 


546 


LABOUR  UNREST:  THE  CAUSES 


workers  have  begun  to  challenge  not  merely  the  rights 
of  the  employers,  of  the  capitalists,  whom  they  habitually 
treat  as  if  they  were  labour’s  worst  enemies,  but  they 
have  threatened  more  than  once  to  make  war  upon  society, 
upon  the  State,  and  upon  the  nation,  unless  their  requests 
were  carried  out  immediately  and  without  discussion. 
It  has  become  the  custom  among  the  workers  to  address 
at  every  opportunity  an  ultimatum  to  the  Government 
demanding  its  unconditional  surrender. 

The  so-called  unrest  of  labour  is  obviously  an  after¬ 
effect  of  the  War,  for  various  countries  are  experiencing 
labour  troubles  which  closely  resemble  those  of  Great 
Britain. 

In  the  past  there  have  been  periods  of  acute  and  wide¬ 
spread  labour  unrest.  However,  the  present  campaign 
of  labour  is  unprecedented  in  character,  because  its 
spokesmen  frankly  state  that  no  rise  in  wages  and  no 
reduction  in  working  hours  will  satisfy  them;  that  their 
principal  aims  are  not  economic,  but  political.  For 
instance,  in  a  Memorandum  on  the  Causes  and  Remedies 
for  Labour  Unrest,  signed  on  behalf  of  labour  by  the 
Rt.  Hon.  Arthur  Henderson  and  Mr.  G.  D.  H.  Cole  and 
presented  to  the  National  Industrial  Conference — the 
text  is  given  in  The  Times  of  March  27,  1919 — we  read: 

The  fundamental  causes  of  labour  unrest  are  to  be 
found  rather  in  the  growing  determination  of  labour  to 
challenge  the  whole  existing  structure  of  capitalist  ind  ustry 
than  in  any  of  the  more  special  and  smaller  grievances 
which  come  to  the  surface  at  any  particular  time. 

These  root  causes  are  twofold — the  breakdown  of  the 
existing  capitalist  system  of  industrial  organisation,  in 
the  sense  that  the  mass  of  the  working  class  is  now  firmly 
convinced  that  production  for  private  profit  is  not  an 
equitable  basis  on  which  to  build  and  that  a  vast  extension 
of  public  ownership  and  democratic  control  of  industry 
is  urgently  necessary.  .  .  . 

The  second  primary  cause  is  closely  linked  with  the 


LABOUR  UNREST:  THE  CAUSES  547 


first.  It  is  that  the  workers  can  see  no  indication  that 
either  the  Government  or  the  employers  have  realised 
the  necessity  for  any  fundamental  change,  or  that  they 
are  prepared  even  to  make  a  beginning  of  industrial 
reorganisation  on  more  democratic  principles.  .... 

It  is  essential  to  question  the  whole  basis  on  which  our 
industry  has  been  conducted  in  the  past  and  to  endeavour 
to  find,  in  substitution  for  the  motive  of  private  gain, 
some  other  motive  which  will  serve  better  as  the  founda¬ 
tion  of  a  democratic  system.  This  motive  can  be  no  other 
than  the  motive  of  public  service.  .  .  .  This  cannot  be 
done  so  long  as  industry  continues  to  be  conducted  for 
private  profit,  and  the  widest  possible  extension  of  public 
ownership  and  democratic  control  of  industry  is  therefore 
the  first  necessary  condition  of  the  removal  of  industrial 
unrest. 

A  series  of  general  suggestions  for  removing  these 
causes  of  discontent  is  given  in  the  Memorandum .  Among 
them  are  the  following : 

A  substantial  beginning  of  the  institution  of  public 
ownership  of  the  vital  industries  and  services.  Mines, 
railways,  docks,  shipping,  etc.,  should  be  at  once  national¬ 
ised.  Key  industries  and  services  should  be  at  once 
publicly  owned.  There  should  be  a  great  extension  of 
municipal  ownership  and  co-operative  control  of  local 
services.  .  .  . 

A  graduated  levy  on  capital,  with  an  exemption  for 
property  up  to  £1,000. 

This  authoritative  declaration  of  faith,  which  is  repre¬ 
sentative  of  many  similar  statements,  shows  that  the 
present  unrest  of  labour  cannot  be  cured  by  the  usual 
expedient  of  readjusting  wages  and  working  hours. 

In  view  of  the  uncompromising  temper  and  the  reckless 
demands  of  labour,  many  believe  that  nothing  but  a  sharp 
and  decisive  struggle  between  capital  and  labour  can 
re-establish  workable  conditions  in  the  industrial  world. 
Force  is  not  always  a  remedy.  Methods  of  violence 
should  be  avoided,  if  possible.  A  labour  war  may  be 


548 


LABOUR  UNREST:  THE  CAUSES 


almost  as  disastrous  as  a  foreign  war.  Hence  it  will 
perhaps  be  best  to  consider  the  present  labour  unrest, 
not  as  a  revolt  against  society  and  against  the  State, 
but  as  a  disease,  or  as  a  symptom  of  a  disease.  Conse¬ 
quently,  the  question  arises  whether  that  disease  is 
curable  only  by  violent  means  or  by  gentle  remedies. 

In  cases  of  serious  illness  purely  symptomatic  treatment 
is  out  of  place.  I  am  inclined  to  think  that  it  is  possible 
to  reconcile  permanently  capital  and  labour.  However, 
before  considering  what  I  believe  may  prove  a  practicable 
and  a  permanent  remedy  for  the  grave  trouble  which 
threatens  the  body  economic  and  the  body  politic  of  the 
nation,  we  should  study  its  causes  and  the  doctrines  by 
which  the  labour  world  at  present  is  guided.  That  study 
will  clear  the  ground.  Let  us  therefore  first  of  all  carefully 
examine  the  aims  and  claims  of  the  workers,  so  that  we 
may  know  which  of  labour’s  aspirations  are  justified  and 
which  are  not  justified,  and  let  us  take  particular  note  of 
the  authoritative  views  of  some  of  the  most  eminent 
statesmen,  business  men,  and  economists  who  have  shown 
themselves  the  sincere  friends  of  labour.  Europe  may 
learn  much  from  America.  Let  us  therefore  give  special 
attention  to  the  lessons  which  we  may  learn  from  the 
Great  Republic. 

The  mind  of  the  labour  world,  both  in  Great  Britain 
and  abroad,  has  for  decades  been  filled  to  saturation  by 
the  anti-capitalist  doctrines  of  that  prince  of  agitators, 
Karl  Marx.  The  important  Memorandum  signed  on 
behalf  of  organised  labour  by  Messrs.  Henderson  and  Cole 
is  purely  Marxian  in  aim  and  spirit.  It  places  in  the 
foreground  the  demand  “  to  challenge,”  which  means  to 
abolish,  “  the  whole  existing  structure  of  capitalist 
industry,”  and  to  tax  private  capital  out  of  existence  by  a 
“  graduated  levy.” 

The  greatest  statesman  and  the  greatest  democrat  of 


LABOUR  UNREST:  THE  CAUSES 


549 


modern  America  was  Abraham  Lincoln.  He  started  life 
as  a  lumberman  in  the  utmost  poverty.  He  rose  to 
eminence  by  his  exertion,  noble  character,  and  genius,  and 
he  died  as  President  of  the  United  States  as  a  poor  man. 
He  ever  was  the  champion  of  the  oppressed  and  of  the 
suffering.  Labour  had  no  greater  and  no  wiser  friend 
than  him. 

Socialism,  on  its  destructive  side,  means  impoverishment 
of  the  rich ;  on  its  constructive  side  it  means  government 
by  an  all-powerful  bureaucracy.  At  the  time  when 
Lincoln  arrived  at  power  the  anti-capitalist  doctrines  of 
Marx  had  spread  far  and  wide,  and  had  become  immensely 
popular  with  the  working  masses  in  the  Old  World  and  in 
the  New.  Lincoln  clearly  recognised  the  fallacy  and 
danger  of  Marxian  Socialism,  and  opposed  a  sane  demo¬ 
cratic  individualism  to  the  doctrines  of  whose  who,  while 
preaching  hatred  and  envy  to  the  wealthy,  desired  to 
place  all  the  living  energies  of  the  nation  under  a  deadening 
bureaucratic  control.  Lincoln  saw  in  capital  and  labour, 
not  enemies,  but  two  partners,  of  whom  labour  was  by 
far  the  more  important,  and  he  pointed  out  the  unwisdom 
of  antagonising  capital  and  enterprise  and  hampering 
the  accumulation  of  wealth.  While  the  collectivist 

9 

doctrines  of  Marx  spread  all  over  Europe,  the  individualist 
views  of  Lincoln  conquered  the  United  States.  They  are 
worth  studying  because  they  have  guided,  and  are  still 
guiding,  the  American  nation,  and,  particularly  because 
the  unprecedented  economic  success  of  the  United  States 
is  largely  due  to  their  policy  of  giving  the  freest  play 
possible  to  the  energies  of  the  individual  and  of  restricting 
the  interference  of  the  State  in  economic  matters  to  the 
absolute  minimum.  The  absence  of  a  violent  antagonism 
between  capital  and  labour,  of  the  “  class  war  ”  preached 
by  Marx,  has  been  a  tower  of  strength  to  the  American 
industries. 


36 


550 


LABOUR  UNREST:  THE  CAUSES 


Lincoln  had  evolved  a  philosophy  of  his  own  about  the 
rights  of  capital  and  the  rights  of  labour.  In  1859  and 
1860  he  formulated  his  views  on  several  occasions.  His 
words  were : 

That  men  who  are  industrious  and  sober  and  honest 
in  the  pursuit  of  their  own  interests  should  after  a  while 
accumulate  capital,  and  also,  if  they  should  choose,  when 
they  have  accumulated  it,  to  use  it  to  save  themselves 
from  actual  labour  and  hire  other  people  to  labour  for  them 
is  right.  It  is  best  for  all  to  leave  each  man  free  to  acquire 
property  as  fast  as  he  can.  Some  will  get  wealthy.  I 
do  not  believe  in  a  law  to  prevent  men  from  getting  rich ; 
it  would  do  more  harm  than  good.  So  while  we  do  not 
propose  any  war  upon  capital,  we  do  wish  to  allow  the 
humblest  man  an  equal  chance  to  get  rich  with  everyone 
else. 

Lincoln  regarded  the  worker  as  the  normal  man,  and 
the  interests  of  labour  as  supreme,  stating : 

Labour  is  prior  to,  and  independent  of,  capital.  Labour 
can  exist  without  capital,  but  capital  could  never  have 
existed  without  labour.  Labour  is  the  superior — greatly 
the  superior — of  capital.  Henceforth  educated  people 
must  labour.  Otherwise  education  itself  would  become 
an  intolerable  evil. 

In  his  message  to  Congress  of  December,  1861,  Lincoln 
stated : 

Labour  is  prior  to,  and  independent  of,  capital.  Labour 
is  the  superior  of  capital,  and  deserves  much  the  higher 
consideration.  Capital  has  its  rights,  which  are  as  worthy 
of  protection  as  any  other  rights.  There  is,  and  probably 
always  will  be,  a  relation  between  labour  and  capital 
producing  mutual  benefits. 

On  March  21,  1864,  in  a  reply  to  a  committee  of  working 
men,  Lincoln  read  to  them  this  part  of  his  message  to 
Congress,  and  added: 


LABOUR  UNREST:  THE  CAUSES 


551 


The  strongest  bond  of  human  sympathy,  outside  of  the 
family  relation,  should  be  one  uniting  all  working  people, 
of  all  nations,  and  tongues,  and  kindreds.  Nor  should 
this  lead  to  a  war  upon  property  or  upon  the  owners  of 
property.  Property  is  the  fruit  of  labour.  Property  is 
desirable,  is  a  positive  good  in  the  world.  .  .  .  Let  not 
him  who  is  houseless  pull  down  the  house  of  another,  but 
let  him  work  diligently,  assured  that  his  own  shall  be 
safe  from  violence  when  built. 

These  phrases  sum  up  the  economic  policy  which  the 
United  States  have  unswervingly  pursued  for  decades. 

The  individualist  policy  of  the  United  States  has  borne 
excellent  fruit.  The  Great  Republic  has  prospered 
marvellously,  and  has  been  singularly  free  from  Socialist 
troubles.  Lord  Bryce  wrote  in  his  standard  work,  The 
American  Commonwealth  : 

There  are  no  struggles  between  privileged  and  un¬ 
privileged  orders,  not  even  that  perpetual  strife  of  rich 
and  poor  which  is  the  oldest  disease  of  cili vised  States.  .  .  . 
No  one  of  the  questions  which  now  agitate  the  nation 
is  a  question  between  rich  and  poor.  Instead  of  suspicion, 
jealousy,  and  arrogance,  embittering  the  relations  of 
classes,  good  feeling  and  kindliness  reign.  .  .  . 

The  agitation  of  the  last  few  years  has  been  directed, 
not  against  the  richer  sort  generally,  but  against  in¬ 
corporated  companies  and  a  few  wealthy  capitalists  who 
are  deemed  to  have  abused  the  powers  which  the  privilege 
of  incorporation  conferred  upon  them,  or  employed  their 
wealth  to  procure  legislation  unfair  to  the  public.  .  .  . 
Property  is  safe,  because  those  who  hold  it  are  far  more 
numerous  than  those  who  do  not. 

The  soil  of  the  Great  Republic  has  proved  singularly 
uncongenial  to  the  destructive  doctrines  of  Marxian 
Socialism.  That  is  a  significant  and  most  important  fact 
which  is  worth  pondering  about. 

It  will  perhaps  be  best  if  we  study  first  the  mistaken 
aims  of  labour,  which  have  unfortunately  filled  the  mind 
of  the  workers,  and  then  explore  the  road  which  may  lead 
to  permanent  industrial  peace  and  to  general  prosperity. 


552 


LABOUR  UNREST:  THE  CAUSES 


Capitalism  is  an  Evil. 

Those  labour  leaders  and  workers  whose  judgment  has 
been  clouded  and  warped  by  Socialistic  teachings  complain 
about  the  constant  and  rapid  growth  of  capital,  about 
its  aggregation  and  concentration,  and  about  the  increas¬ 
ing  wealth  of  the  rich,  as  if  wealth  in  itself  was  an  evil. 

Modern  industry  requires  the  investment  of  gigantic 
and  constantly  increasing  amounts  of  capital  to  provide 
the  complicated,  powerful,  and  very  costly  machinery 
with  the  use  of  which  modern  men  make  a  living.  More¬ 
over,  as  a  large  factory  can  work  far  more  efficiently, 
produce  more  cheaply,  and  pay  higher  wages  than  a 
number  of  small  ones,  an  irresistible  tendency  has  arisen 
towards  the  aggregation  and  concentration  of  capital. 
This  tendency  is  beneficial  to  the  workers  and  to  the 
nation  as  a  whole.  It  can  be  stopped  only  by  stopping 
industry.  One  of  the  most  successful  business  men  of 
modern  times  was  Mr.  Andrew  Carnegie.  He  has  been 
equally  eminent  as  a  captain  of  industry  and  as  a  philan¬ 
thropist.  He  was  a  democrat  of  the  democrats.  He  rose 
from  the  utmost  poverty.  His  parents  had  to  work  hard 
for  a  mere  bodily  subsistence.  He  himself  started  life 
as  a  labourer.  Mr.  Carnegie  could  therefore  look  at  in¬ 
dustrial  problems  not  merely  from  the  point  of  view  of 
the  employer  and  of  the  philanthropist,  but  also  from  that 
of  the  worker.  Hence  his  opinions  were  of  the  greatest 
value  to  both  employers  and  employed.  Mr.  Carnegie 
wrote  in  his  Gospel  of  Wealth  (Mr.  Gladstone  provided  the 
title  of  that  book) : 

We  conclude  that  this  overpowering,  irresistible 
tendency  towards  aggregation  of  capital  and  increase  of 
size  in  every  branch  of  product  cannot  be  arrested  or 
even  greatly  impeded,  and  that,  instead  of  attempting 
to  restrict  either,  we  should  hail  every  increase  as  some- 


LABOUR  UNREST:  THE  CAUSES 


553 


thing  gained,  not  for  the  few  rich,  but  for  the  millions  of 
poor,  seeing  that  the  law  is  salutary,  working  for  good  and 
not  for  evil.  Every  enlargement  is  an  improvement, 
step  by  step,  upon  what  has  preceded.  It  makes  for 
higher  civilisation,  for  the  enrichment  of  human  life,  not 
for  one,  but  for  all  classes  of  men.  It  tends  to  bring  to 
the  laborer’s  cottage  the  luxuries  hitherto  enjoyed  only  by 
the  rich,  to  remove  from  the  most  squalid  homes  much  of 
their  squalor,  and  to  foster  the  growth  of  human  happiness 
relatively  more  in  the  workmen’s  home  than  in  the 
millionaire’s  palace.  It  tends  to  make  the  poor  richer  in 
the  possession  of  better  things,  and  greatly  lessens  the 
wide  and  deplorable  gulf  between  the  rich  and  the  poor. 
Superficial  politicians  may,  for  a  time,  deceive  the  unin¬ 
formed,  but  more  and  more  will  all  this  be  clearly  seen  by 
those  who  are  now  led  to  regard  aggregations  as  injurious. 

The  modern  world,  in  which  the  prosperity  and  well¬ 
being  of  the  masses  depend  upon  an  enormous  and  most 
costly  mechanical  outfit,  requires  the  free  use  of  a  vast 
amount  of  liquid  wealth,  of  capital.  Now,  capital  itself, 
however  great,  is  of  little  use  unless  it  is  judiciously 
employed  by  far-sighted  practical  men,  for  it  is  far  easier 
to  waste  money  on  worthless  objects  than  to  use  it  wisely. 

Nowhere  is  the  reckless  waste  of  monev  more  noticeable 

%/ 

than  among  the  Government  officials  to  whom  the 
Socialists  would  entrust  the  direction  of  the  national 
industries.  But  then,  of  course,  they  are  not  spending 
their  own  money,  but  that  of  the  taxpayer.  The  judicious 
handling  of  large  amounts  of  capital  is  a  business.  It 
requires  certain  high  qualifications  which  are  possessed 
only  by  a  few  specialists.  Men  who  possess  these  special 
qualifications  are  called  capitalists.  The  welfare  of 
industries  and  of  nations  depends  not  only  on  the  posses¬ 
sion  of  able  engineers,  inventors,  chemists,  workers,  etc., 
but  also,  and  particularly,  on  the  possession  of  able 
capitalists  who  act  as  organisers  in  the  industrial  common¬ 
wealth.  Mr.  Carnegie  wrote  in  his  Gosyel  of  Wealth  : 


554 


LABOUR  UNREST  :  THE  CAUSES 


Able  men  soon  create  capital;  in  the  hands  of  those 
without  the  special  talent  required,  capital  soon  takes 
wings.  It  is  a  law  as  certain  as  any,  that  men  possessed 
of  this  peculiar  talent  for  affairs,  under  the  free  play  of 
economic  forces,  must,  of  necessity,  soon  be  in  receipt 
of  more  revenue  than  can  be  judiciously  expended  upon 
themselves. 

The  modern  capitalist  is,  as  a  rule,  not  a  “  drone,”  as 
the  Socialists  tells  us,  not  a  man  who  leads  an  aimless  life 
of  vulgar  self-indulgence,  but  he  is  in  the  first  place,  and 
sometimes  exclusively,  a  worker  and  an  organiser,  a 
creator  of  wealth  and  of  industry  and  of  general  prosperity. 
Mr.  Carnegie  has  told  us  in  his  Empire  of  Business: 

The  modern  millionaire  is  generally  a  man  of  very 
simple  tastes  and  even  miserly  habits.  He  spends  little 
upon  himself,  and  is  the  toiling  bee  laying  up  the  honey 
in  the  industrial  hive,  which  all  the  inmates  of  that  hive, 
the  community  in  general,  will  certainly  enjoy.  .  .  .  The 
millionaire  who  toils  on  is  the  cheapest  article  which  the 
community  secures  at  the  price  it  pays  for  him — namely, 
his  shelter,  clothing,  and  food. 

Mr.  Carnegie  shrewdly  added: 

Here  is  a  remarkable  fact,  that  the  masses  of  the  people 
in  any  country  are  prosperous  and  comfortable  just  in 
proportion  as  there  are  millionaires. 

Capital  consists  in  wealth  usefully  and  reproductively 
employed,  and  the  capitalists  are  the  managers  of  that 
great  creative  and  fertilising  force.  Great  Britain  suffers, 
not  from  a  superabundance  of  capital  and  of  capitalists, 
as  so  many  deluded  labour  leaders  allege,  but  from  an 
insufficiency.  Wealth  and  income,  both  absolute  and 
per  head  of  population,  are  far  greater  in  the  United  States 
than  in  the  United  Kingdom.  Before  the  War,  American 
wages  were  from  two  to  three  times  as  great  as  they  were 
in  the  identical  trades  in  Great  Britain.  As  the  cost  of 
living  was  only  slightly  higher  in  the  United  States  than 


LABOUR  UNREST:  THE  CAUSES  555 

% 

in  England,  the  American  workers  were  infinitely  more 
prosperous  than  the  British  workers.  The  greater 
prosperity  of  the  American  workers  was  due  to  the  fact 
that  they  produced  per  head  from  two  to  three  times  as 
much  as  did  the  British  workers  engaged  in  the  identical 
callings,  as  I  have  shown  very  fully  in  this  book.  The 
greater  output  of  the  American  workers  was  made  possible 
and  easy  by  their  employing  more  perfect  machinery,  and 
from  two  to  three  times  as  much  horse-power  per  thousand 
workers  with  which  to  set  it  in  motion,  as  I  have  shown 
very  fully  in  previous  chapters  by  analysing  the  British 
and  American  Censuses  of  Production  of  1907  and  1909. 
The  Americans  have  both  more  perfect  machinery  and 
far  more  power  with  which  to  drive  it,  because  a  much 
larger  amount  of  capital  is  invested  in  the  American 
industries  than  in  the  British  industries.  An  analysis 
of  the  capital  employed  in  the  British  and  American 
industries,  based  upon  the  British  and  American  Censuses 
of  Production,  yields  the  following  most  interesting, 
most  important,  and  most  valuable  results : 

United  Kingdom  in  1907. 

Capital  invested  in  the  manufacturing  indus¬ 
tries  £1,400,000,000  to  £1,600,000,000,  say  . . 

Persons  engaged  in  same 
Wage-earners  ditto  ditto 
Capital  per  person  engaged 
Capital  per  wage-earner 

United  States  in  1909. 

Capital  invested  in  the  manufacturing  industries 

$18,428,271,000  . =  £3,685,654,000 


Persons  engaged  in  same  . .  . .  . .  —  7,678,578 

Wages-earners  ditto  ditto  . .  . .  —  6,615,046 

Capital  per  person  employed,  $2,415  .  .  =  £483 

Capital  per  wage-earner,  $2,786  . .  . .  =  £557 


It  will  be  noticed  that  the  capital  per  worker  is  from 
two  to  three  times  as  great  in  the  United  States  as  in  the 


£1,500,000,000 

7,087,123 

6,493,129 

£212 

£246 


556 


LABOUR  UNREST:  THE  CAUSES 


United  Kingdom.  We  can  therefore  not  wonder  that 
output  and  wages  per  worker  also  are  from  two  to  three 
times  as  great  in  the  United  States  as  in  Great  Britain. 

The  British  Census  of  Production  stated : 

The  aggregate  of  all  industrial  capital  arrived  at — viz., 
£1,400,000,000  to  £1,600,000,000 — includes  both  the 
value  of  land,  buildings,  and  plant,  and  the  value  of  the 
working  capital  used  in  the  various  enterprises. 

The  startling  difference  between  the  British  and  Ameri¬ 
can  capital  employed  per  worker  in  industry  is  therefore 
not  due  to  a  great  understatement  on  the  part  of  the 
British  Census-taker.  The  British  industries  suffer,  not 
from  a  plethora  of  capital,  but  from  its  insufficiency, 
from  financial  ansemia.  Yet  there  are  labour  leaders 
who  advocate  the  diminution,  and  even  the  destruction, 
of  capital  in  the  interest  of  and  for  the  benefit  of  the 
workers. 

The  steady  growth  of  population,  the  constant  increase 
in  the  requirements  of  an  increasing  number  of  people 
which  is  brought  about  by  the  increasing  wants  felt  by 
men  who  live  in  a  period  of  advancing  civilisation,  require 
a  constant  and  rapid  increase  in  the  income  of  the  nation 
and  of  the  individuals  composing  it.  That  rapid  increase 
in  income  can  be  secured  only  by  a  correspondingly 
rapid  increase  in  production,  which  in  turn  can  be  brought 
about  only  by  a  rapid  increase  in  capital  invested  in 
factories,  warehouses,  machinery,  railways,  shipping,  etc. 
The  very  full  and  reliable  American  statistics — unfor¬ 
tunately,  no  corresponding  statistics  exist  for  Great 
Britain — enable  us  to  gauge  the  yearly  capital  require¬ 
ments  of  industries .  The  capital  invested  in  the  American 
industries  amounted,  at  the  Census  of  Production  of  1909, 
to  $18,428,270,000,  or  to  £3,685,654,000.  It  amounted,  at 
the  Census  of  Production  of  1914,  to  $22,790,979,937,  or  to 
£4,558,135,587.  It  follows  that  during  the  five  years 


LABOUR  UNREST:  THE  CAUSES 


557 


from  1909  to  1914  the  capital  invested  in  the  American 
industries  was  increased  by  the  gigantic  sum  of 
£872,481,587.  That  huge  sum  of  money,  required  by 
the  American  manufacturing  industries,  had  to  be  found 
by  the  capitalists,  and  it  came,  of  course,  out  of  profits. 
However,  this  is  not  all.  In  addition  to  this  sum  which 
actually  was  added  to  the  value  of  the  American  industrial 
outfit  in  the  form  of  new  buildings,  machinery,  etc.,  at 
least  as  large  a  sum  was  added  to  it  in  the  form  of  renewals 
and  repairs,  while  an  additional  huge  amount  was  spent 
in  the  erection  of  buildings  and  machinery  which  proved 
unprofitable,  became  disused  and  was  therefore  excluded 
from  the  Census  figures.  Capitalists’  profits  have  evi¬ 
dently  their  uses. 

The  most  eminent  American  economists  share  Mr. 
Carnegie’s  opinion  that  the  great  capitalists,  far  from 
being  the  enemies  of  society,  are  indispensable  in  modern 
business;  that  what  the  Socialists  sneeringly  call  “  capital¬ 
ism  ”  is  not  a  curse,  but  a  blessing.  For  instance, 
Professor  Hadley,  the  President  of  the  celebrated  Yale 
University,  wrote  in  his  excellent  book  Economics : 

To  the  mediaeval  economist  the  business  man  was  a 
licensed  robber;  to  the  modern  economist  he  is  a  public 
benefactor.  .  .  .  To-day  we  believe  that  money  is  made 
on  a  large  scale  by  doing  the  public  a  service.  If  a  man’s 
goods  command  a  high  price,  we  assume  that  he  has  met 
an  actual  need.  If  this  price  furnishes  him  a  large  margin 
of  profit,  we  believe  that  he  has  so  organised  the  labour 
under  his  control  as  to  diminish  not  only  his  own  expenses, 
but  the  actual  labour  cost  of  producing  the  goods.  So 
confident  are  we  of  the  substantial  identity  of  interest 
between  the  business  man  and  the  community  as  a  whole 
that  we  give  our  capitalists  the  freest  chance  to  direct 
the  productive  forces  of  society  to  their  own  individual 
profit.  Even  the  mistakes  of  private  enterprise  may  prove 
a  means  of  progress  to  society,  since  they  show  at  com¬ 
paratively  small  cost  what  is  to  be  avoided  in  the  future. 


558 


LABOUR  UNREST:  THE  CAUSES 


The  fact  that  the  present  organisation  of  capital  is  the 
result  of  historical  development,  and  that  the  present 
forms  have  survived  while  others  failed,  is  the  strongest 
proof  of  their  vitality.  .  .  .  While  it  is  undoubtedly 
true  that  the  various  rights  of  the  capitalist  depend  upon 
the  existence  of  a  civilised  society  which  maintains  them, 
it  seems  equally  true  that  the  existence  of  a  civilised 
society  in  the  stress  of  the  struggle  for  existence  among 
different  members  of  the  human  race  depends,  for  the 
present  at  any  rate,  upon  maintaining  the  rights  of  the 
capitalist. 

Many  labour  leaders  and  workers,  while  acknowledging 
the  necessity  of  abundant  capital,  object  to  the  individual 
capitalist.  They  assert  that  the  capitalist  employer 
autocratically  directs  industry  in  accordance  with  his 
personal  will  and  whim.  That  view  is  totally  mistaken. 
The  most  powerful  and  most  autocratic  capitalist  has  a 
still  more  powerful  and  more  autocratic  master.  Lord 
Leverhulme,  the  English  soap  king,  who  started  his  career 
as  a  poor  grocer’s  assistant,  stated  on  December  7,  1917, 
at  Bolton,  addressing  a  meeting  largely  composed  of 
workers : 

You  will,  perhaps,  think  I  am  a  master,  and  perhaps 
that  men  who  are  working  for  the  company  of  which  I 
am  chairman  come  under  the  description  of  servants. 
Think  a  little  more  deeply  for  a  moment.  There  is  not  a 
man  in  this  room,  not  one  in  this  church,  who  has  so 
hard  a  taskmaster  over  him  as  the  so-called  masters  have. 
So  far  as  this  world  is  concerned,  the  master  of  every 
employer  of  labour  in  Bolton  and  in  the  United  Kingdom 
is  the  consumer.  You  can  see  this  every  day.  Articles 
go  up  in  demand,  and  the  enterprise  that  produces  sueh 
articles  is  flourishing.  Then  the  consumer  ceases  to 
demand  that  article,  takes  to  something  else,  and  the  man 
who,  as  employer,  was  prosperous  and  successful  is  reduced 
to  the  Bankruptcy  Court,  and  is  as  much  discharged  as 
the  so-called  servant.  .  .  .  There  is  not  a  master  in  the 
United  Kingdom  to-day  who  has  not  a  supreme  master 
over  him  in  the  form  of  the  consumer. 


LABOUR  UNREST  :  THE  CAUSES 


559 


A  man  becomes  a  great  capitalist  because  he  meets  a 
great  public  want  and  renders  a  great  public  service, 
and  frequently  he  has  to  fight  the  most  determined  oppo¬ 
sition  of  those  whom  he  wishes  to  benefit.  Hostile  crowds 
smashed  the  textile  machinery  and  tried  to  prevent  the 
building  of  the  railways.  Railway  surveys  had  often  to 
be  made  at  night.  A  democratic  Government  would  pro¬ 
bably  have  refused  to  undertake  so  unpopular  a  measure 
as  the  introduction  of  mechanical  spinning  and  weaving 
and  of  railway-building.  It  is  a  fallacy  to  describe 
the  great  capitalist  as  an  exploiter  and  a  curse  to  society. 

Private  investors  also  who  do  not  manage  industrial 
and  commercial  undertakings  are  not  merely  drones. 
The  capital  of  the  investors  is,  as  a  rule,  the  result  of 
their  own  labour  and  thrift  or  of  the  labour  and  thrift  of 
their  forbears,  and  they  provide  a  large  part  of  the  funds 
which  are  employed  by  managing  capitalists,  financiers, 
etc.,  for  the  development  of  commerce  and  of  industry. 

The  manufacturer,  unlike  the  worker,  receives  no 
regular,  fixed,  and  secure  pay,  but  a  variable  one.  He 
is  paid  by  result.  If  he  is  unskilled  or  incompetent, 
he  will  go  bankrupt;  if  he  is  moderately  competent,  he 
will  obtain  a  moderate  income ;  if  he  is  highly  competent, 
he  may  become  wealthy.  Payment  by  result  is  a  mighty 
stimulus.  The  effort  to  make  money  is  a  most  powerful 
incentive  to  work  in  the  service  of  the  community — is, 
in  fact,  the  most  powerful  incentive  the  world  has  yet 
known.  Great  wealth  is  accumulated  in  industry  by 
great  services  rendered  to  society.  Mr.  Carnegie  obtained 
a  gigantic  fortune  by  creating  in  the  United  States  by  far 
the  greatest  iron  industry  in  the  world.  Millions  of 
Americans  have  become  prosperous  owing  to  that  man’s 
business  genius. 

The  factories  and  workshops  which  have  arisen  owing 
to  Mr.  Carnegie’s  extraordinary  business  ability  employ 


560 


LABOUR  UNREST:  THE  CAUSES 


hundreds  of  thousands  of  workers.  He  has  created  entire 
towns.  Countless  millions  had  to  be  sunk  by  Mr.  Carnegie 
andhis  associates  in  creating  that  great  American  industry. 
Mr.  Carnegie  started  life  as  a  penniless  worker,  and  so  did 
most  of  his  associates.  Wherefrom,  then,  did  Mr.  Carnegie 
and  his  co-Directors,  get  the  enormous  funds  required 
for  creating  the  greatest  iron  industry  in  the  world  ? 
Chiefly  out  of  profits,  and  these  profits  enabled  the  Direc¬ 
tors  to  pay  substantial  wages  to  a  vast  army  of  workers. 
Professor  Hadley  pithily  wrote :  ‘  ‘  Accumulations  of 
capital  have  their  chief  usefulness  as  a  means  of  producing 
income.”  The  colossal  profits  of  the  Carnegie  enterprise 
benefited  chiefly  the  workers.  The  Carnegie  wealth  is  a 
trifle  compared  with  the  wealth  which  Mr.  Carnegie 
has  distributed  among  the  American  people. 

Wealth  is  created  by  the  co-operation  of  various  factors 
— namely,  capital,  labour,  technical  ability,  and  the 
community.  Labour  is  one  of  the  factors,  and  it  is,  of 
course,  indispensable.  However,  directing  and  organising 
ability  is  equally  indispensable,  for  labour  left  to  itself 
produces  only  little.  If  a  large  factory  experiences 
misfortune,  what  happens  ?  A  new  manager  is  appointed. 
He  may  change  the  organisation  and  the  machinery, 
but  he  will  keep  on  the  workers.  If  he  is  capable,  he  will 
make  the  factory  exceedingly  prosperous.  The  same 
workers  who  were  working  with  a  loss  and  who  were 
threatened  with  dismissal  are  producing  prosperity. 
The  success  of  industries,  as  of  armies,  depends  princi¬ 
pally  on  the  leaders.  A  good  General  makes  a  good  army, 
and  he  is  worth  as  much  as  an  army,  although  the  soldiers 
do  the  fighting. 

The  assertion  that  labour  creates  all  wealth  is  obviously 
untrue.  This  was  very  neatly  pointed  out  by  Lord 
Leverhulme  in  an  address  to  Liverpool  workers  delivered 
on  November  25,  1917.  He  said: 


LABOUR  UNREST:  THE  CAUSES 


561 


Does  any  man  begrudge  Ford  his  live  millions  sterling 
a  year  that  he  is  making  ?  Fancy  !  that  is  £100,000  every 
week.  Does  anyone  begrudge  it  ?  If  any  do  I  could 
imagine  them  saying  to  themselves:  “It  is  true  Ford 
serves  the  public  with  a  cheap  car  and,  for  the  price,  a 
good  car.  It  is  true  Ford  serves  his  workers  in  his  fac¬ 
tories  well,  because  he  pays  them  double  wages;  in  fact, 
he  starts  a  boy  fresh  from  school  at  a  pound  a  day.  But, 
but,  but,  Mr.  Ford,  you  make  too  much  money.  .  .  .” 

Now  let  us  imagine  a  scene  at  Ford’s  works.  We  will 
imagine  that  his  20,000  or  so  operatives — I  am  not  sure 
how  many  he  has,  but  we  will  say  20,000;  it  may  be 
40,000 — read  in  the  paper  that  Ford  has  made  five  million 
pounds  sterling,  twenty-five  million  dollars,  the  year 
before,  and  they  have  discussed  that  fact,  and  they  have 
come  to  the  conclusion  that  Mr.  Ford  is  making  far 
too  much,  and  have  decided  that  they  will  go  and  inter¬ 
view  him,  because  “  labour  creates  all  wealth,”  say  they 
— ‘ £  Adam  Smith  told  us  so ;  and  therefore  this  money  is 
not  Ford’s;  we  make  that  money,  we  ought  to  have  it.” 
They  go  and  wait  on  Ford,  and  they  lay  their  case  before 
him  fairly,  perfectly  fairly.  Now  we  will  imagine  his 
reply.  Now,  Ford,  I  imagine,  would  say  this : 

“  Now,  my  men,  I  don’t  want  you  to  make  a  penny  of 
this  money  for  me.  Go  right  away  and  make  it  for  some 
other  motor-man,  one  of  my  competitors,  who  cannot 
make  money  for  himself,  who  is  perhaps  losing  money. 
Leave  me  right  away  and  go  and  engage  with  that  man ; 
he  will  give  you  nearly  all  the  profit ;  he  is  losing  money 
now,  or  making  none.  You  can  make  your  own  terms 
with  him.  He  will  give  you  at  least  nine-tenths  of  the 
profit,  because  if  he  got  a  tenth  he  would  be  content. 
You  go  and  make  him  five  millions,  and  perhaps  he  will 
give  you  nineteen-twentieths,  perhaps  even  ninety-nine 
one-hundredths  of  it ;  but  you  can  make  your  own  terms 
with  him.  You  will  get  splendid  terms  from  him ;  in  fact, 
you  can  dictate  your  own  terms.  As  to  myself,  those  men 
who  will  be  sacked  from  this  motor-man  who  is  not 
making  money — why,  I  will  engage  them;  it  will  be 
merely  a  change  over.  You  men  who  are  making  my 
money  will  go  and  make  it  for  these  other  people ;  their 
workmen  will  come  and  work  for  me,  and  I  will  pay  them 


562 


LABOUR  UNREST:  THE  CAUSES 


double  wages  as  I  am  paying  you,  and  I  will  see  if  I  cannot 
make  as  much  money  without  you  as  with  you.’’ 

The  Poverty  of  the  Workers. 

According  to  the  teachings  of  Marxian  Socialism  there  is 
under  the  capitalist  regime  a  “  law  of  increasing  misery,” 
according  to  which  the  rich  grow  constantly  richer  and 
the  poor  constantly  poorer.  Its  absurdity  is  clear. 
On  the  other  hand,  it  is  equally  obvious  that  wealth  is 
unequally  distributed,  but  so  are  health,  strength,  good 
looks,  and  talent.  An  eminent  New  York  merchant, 
Mr.  Eugenius  H.  Outerbridge,  stated  with  American 
brevity,  in  an  address  delivered  at  Albany,  N.Y.,  on 
December  13,  1918: 

The  spirit  of  unrest  has  been  said  to  largely  spring,  not 
alone  from  unequal  conditions  of  life,  but  from  what  has 
been  called  the  “  unequal  distribution  of  wealth.” 

Undoubtedly  what  has  been  meant  is  the  unequal 
acquisition  of  wealth,  but  there  will  always  be  unequal 
acquisition  of  wealth  as  long  as  there  is  unequal  distribu¬ 
tion  of  brains,  industry,  and  thrift,  and  those  are  qualities 
of  mind  and  character  which  no  statutory  laws  can  create 
or  control,  but  the  beneficent  exercise  of  which  unwise 
law  can  greatly  restrict  and  discourage. 

Some  are  born  rich,  some  well-to-do,  some  poor.  Some 
who  were  born  rich  become  poor,  and  some  who  were 
born  poor  become  wealthy,  and  it  is  good  that  this  is  so. 
Mr.  Carnegie,  who  was  born  in  a  hovel,  wrote  in  his 
Empire  of  Business: 

It  is  the  fashion  nowadays  to  bewail  poverty  as  an  evil, 
to  pity  the  young  man  who  is  not  born  with  a  silver  spoon 
in  his  mouth ;  but  I  heartily  subscribe  to  President 
Garfield’s  doctrine  that  “  the  richest  heritage  a  young  man 
can  be  born  to  is  poverty.”  I  make  no  idle  prediction 
when  I  say  that  it  is  from  that  class  from  whom  the  great 
and  the  good  will  spring.  It  is  not  from  the  sons  of 


LABOUR  UNREST:  THE  CAUSES 


563 


the  millionaire  or  the  noble  that  the  world  receives  its 
teachers,  its  martyrs,  its  inventors,  its  statesmen,  its 
poets,  or  even  its  men  of  affairs.  It  is  from  the  cottage 
of  the  poor  that  all  these  spring.  We  can  scarcely  read 
one  among  the  few  “  immortal  names  that  were  not  born 
to  die,”  or  who  has  rendered  exceptional  service  to  our 
race,  who  had  not  the  advantage  of  being  cradled,  nursed, 
and  reared  in  the  stimulating  school  of  poverty.  There  is 
nothing  so  enervating,  nothing  so  deadly  in  its  effects 
upon  the  qualities  which  lead  to  the  highest  achievement, 
moral  or  intellectual,  as  hereditary  wealth.  .  .  . 

The  ery  goes  forth  often  nowadays — “  Abolish  poverty.” 
but  fortunately  this  cannot  be  done;  and  the  poor  we 
are  always  to  have  with  us.  Abolish  poverty,  and  what 
would  become  of  the  race  ?  Progress,  development, 
would  cease.  Consider  its  future  if  dependent  upon  the 
rich.  The  supply  of  the  good  and  the  great  would  cease, 
and  human  society  retrograde  into  barbarism. 

In  this  world  of  ours  there  are  opportunities  for  all. 
J.  D.  Rockefeller,  the  oil  magnate;  P.  D.  Armour,  the 
Chicago  meat  king;  C.  Vanderbilt,  the  great  railway 
financier,  the  founder  of  the  great  Morgan  banking-house 
in  New  York ;  and  Mr.  J.  M.  Pullman,  of  Pullman  Car  fame, 
started  business  as  farm-labourers.  T.  Edison  was  a 
newspaper-boy,  the  founder  of  the  house  of  Rothschild 
a  pedlar,  the  founder  of  the  great  Krupp  firm  a  poor  smith. 
The  foundation  of  the  vast  wealth  of  the  families  of 
Guinness,  Bass,  Coats,  was  laid  by  men  who  were  born 
poor.  Most  of  the  great  engineers  and  inventors  were 
working-men.  Sir  R.  Arkwright,  the  inventor  of  the 
spinning  machine,  was  an  illiterate  barber.  Burns  the 
poet,  Cook  the  navigator,  and  Brindley  the  great  engineer, 
were  day-labourers.  Mr.  Asquith,  Mr.  Lloyd  George, 
General  Sir  William  Robertson,  Lord  Northcliffe,  and 
countless  others,  were  born  in  humble  circumstances. 
Half  the  English  peerage  has  come  from  the  ranks  of  the 
toilers.  Many  of  the  American  Presidents  were  born 


rm 


LABOUR  UNREST :  THE  CAUSES 


in  poverty.  Poverty,  instead  of  being  a  bar  to  wealth 
and  power,  to  eminence  in  science  and  in  art,  is  an  in¬ 
valuable  incentive  to  effort.  Men  who  were  born  poor 
have  become  rich  in  everything  that  is  worth  having. 


The  Taxation  of  Wealth. 

Guided  by  their  hatred  of  capital  and  of  the  capitalists, 
many  labour  leaders  advocate  the  most  drastic  taxation 
of  wealth.  Some  wish  to  tax  the  wealthy  out  of  existence 
by  a  heavy  income-tax  and  by  very  high  death  duties. 
Others,  who  find  this  process  of  abolishing  the  capitalists 
too  slow  and  too  mild,  demand  that  the  State  should  seize 
the  wealth  of  the  wealthy  by  what  is  called  “  a  levy  on 
capital,55  a  measure  which  is  recommended  in  the  Memoran¬ 
dum  given  in  the  beginning  of  this  paper. 

A  high  income-tax  and  high  death  duties  are  immensely 
popular  among  the  workers.  The  enormously  increased 
imposts  which  were  laid  upon  the  rich  in  the  course  of 
the  War  were  greeted  with  the  greatest  satisfaction  by 
the  workers,  because  they  imagined  that  they  would 
rapidly  reduce  the  wealth  and  income  of  the  capitalists. 
To  their  amazement,  the  enormous  income-tax,  super-tax, 
excess  profits  tax,  etc.,  led  not  to  the  impoverishment 
of  the  wealthy,  for  their  capital  and  their  income  grew 
more  quickly  than  ever  before.  Many  workers  have 
therefore  come  to  believe  that  the  wealth  and  income  of 
the  capitalists  is  far  greater  than  was  ever  suspected. 

A  little  thought  should  make  it  clear  to  all  that  taxes 
on  the  capital  and  income  of  the  wealthy  are  apt  to  lead, 
not  to  a  shrinkage  of  their  wealth,  but  to  an  increase  in 
wealth  similar  to  the  amount  of  the  taxes  imposed.  The 
wealth  of  the  capitalists  is  invested  chiefly  in  productive 
undertakings,  such  as  factories  and  railways.  Their 
wealth  and  income  serve  partly  for  the  satisfaction  of  their 


LABOUR  UNREST:  THE  CAUSES 


565 


personal  needs,  but  chiefly  for  the  maintenance  of  the 
national  industry.  Let  us  assume  that  a  manufacturer 
makes  normally  a  profit  of  £100,000  per  year  from  his 
factory;  that  he  pays  £10,000  in  taxes,  spends  £5,000  on 
himself  and  his  family,  and  employs  the  remaining 
£85,000  for  repairs,  renewals,  and  extensions  of  his  factory, 
which  give  work  and  wages  to  a  large  number  of  workers. 
If  the  State  increases  the  taxes  of  that  manufacturer  by 
£50,000,  he  will  be  compelled  to  increase  the  selling  price 
of  his  goods  by  a  similar  amount,  and  will  pay  his  taxes 
out  of  his  increased  profits,  for  otherwise  he  will  not  be  able 
to  keep  his  factory  in  good  going  order.  If  thereupon 
his  taxes  are  increased  by  another  £50,000,  he  will  proceed 
to  increase  the  selling  price  of  his  wares  once  more  by  a 
similar  amount,  for  otherwise  he  will  become  bankrupt 
and  will  have  to  close  his  factory.  Similar  considerations 
apply  in  the  main  to  death  duties,  which,  though  paid  by 
the  rich,  are  treated  as  a  business  expenditure  which  has 
to  be  provided  for  in  the  price  of  the  goods  produced,  or 
in  the  house-rent,  or  in  the  rate  of  interest  charged.  It 
follows  that  the  income-tax,  as  the  taxes  on  capital,  such 
as  death  duties,  are,  as  long  as  possible,  paid  chiefly 
by  labour  without  diminishing  capital.  It  would  be 
very  dangerous  indeed  for  the  workers  if  the  high  taxes 
imposed  upon  the  rich  should  lead  to  the  shrinkage  of 
the  national  capital,  of  which  the  rich  are  merely  the 
managing  trustees. 

An  industrial  State  absolutely  requires  vast  and 
constantly  growing  sums  of  capital  invested  in  productive 
undertakings.  Hence  heavy  imposts  placed  upon  capital 
are  likely  to  lead,  not  to  its  diminution,  but  merely  to  an 
increase  in  the  price  of  goods,  to  a  rise  in  the  cost  of  living. 
By  insisting  that  enormous  taxes  should  be  laid  upon  the 
rich  manufacturers,  merchants,  etc.,  the  workers  fre¬ 
quently  hurt  but  little  the  capitalists  whose  money  is 

37 


566 


LABOUR  UNREST:  THE  CAUSES 


invested  in  commerce  and  industry,  but  hurt  themselves 
very  much  by  raising  the  prices  of  all  goods,  house-rents, 
etc.,  against  themselves. 

The  capitalists  are  not  merely  the  managers  of  the 
national  industries,  but  they  serve  at. the  same  time  as 
unofficial  tax  collectors  to  the  Government.  They 
convert  the  heavy  direct  taxes  which  are  laid  upon  them, 
and  which  they  cannot  pay  except  at  the  cost  of  ruinously 
reducing  the  capital  required  for  industry  and  commerce, 
into  indirect  taxes,  and  these  are  paid  by  the  people  in 
general  in  the  price  of  the  goods  they  buy.  The  workers 
should  learn  that  by  taxing  the  rich  they  are  taxing  them¬ 
selves;  that  a  high  income-tax,  high  death  duties,  and  a 
“  levy  on  capital,”  come  out  of  their  own  pockets;  that 
they  are  quite  as  much  interested  in  strict  economy  in 
national  and  local  affairs  as  the  richest  income-tax  payers. 

Of  course,  there  is  a  limit  beyond  which  prices  cannot 
be  raised  by  the  taxation  of  the  rich.  When  that  limit 
has  been  passed,  national  decay  and  ruin  begin.  When, 
owing  to  overgreat  taxation,  the  price  of  British  goods 
has  been  raised  so  much  that  their  sale  abroad  falls  off, 
then  the  country  can  no  longer  pay  for  the  food  and  raw 
materials  which  must  be  imported.  Then  the  industries  of 
the  country  come  to  a  standstill.  Food  becomes  scarce, 
and  unemployment  and  suffering  become  universal. 
Bankrupt  factories  are  almost  valueless.  Unduly  high 
taxes  may  result,  not  merely  in  reducing  the  private 
wealth  of  the  few — a  matter  which  is  comparatively  un¬ 
important — but  in  destroying  the  wealth  of  the  nation. 
A  modern  industrial  State  requires  vast  amounts  of  capital 
handled  by  able  capitalists.  The  diminution  of  that 
capital  or  the  elimination  of  the  men  who  handle  it  brings 
suffering  to  all.  That  has  been  shown  by  the  example 
of  Russia.  Imbued  by  the  Marxian  ideas,  the  Bolsheviks 
destroyed  the  Russian  capitalists,  and  in  doing  so 


LABOUR  UNREST:  THE  CAUSES 


567 


destroyed  capital  as  well.  Thus  they  brought  the  whole 
economic  life  of  the  country  to  a  standstill  and  reduced 
the  people  to  starvation.  It  is  obvious  that  capital  is 
indestructible,  except  at  the  cost  of  general  ruin.  Even 
the  poorest  labourer  pays  his  share  of  the  income-tax,  the 
super-tax,  the  excess  profits  tax,  and  of  the  death  duties, 
although  he  may  not  know  it. 


The  Limitation  of  Output. 

The  workers  naturally  desire  to  have  good  wages,  easy 
hours  of  labour  and  pleasant  work ;  to  have  the  advantage 
of  cheap  prices  and  to  be  able  to  get  plenty  of  relaxation 
and  amusement.  As  far  as  tangible  objects  are  concerned, 
they  wish  to  have  good  clothes,  good  food,  good  houses, 
good  furniture,  etc.  Men’s  comfort  and  happiness  depend, 
in  the  first  place,  on  an  adequacy  of  tangible  things,  for 
high  money  wages  and  easy  working  hours  will  not 
compensate  them  if  they  suffer  from  an  insufficiency  of 
food,  clothes,  etc.  Prosperity  depends  on  high  consump¬ 
tion,  and  high  consumption  is  possible  only  if  there  is 
high  production. 

Unfortunately,  many  trade  unions  have  endeavoured 
'  to  create  an  artificial  prosperity  for  the  workers  by  limiting 
output.  Instead  of  creating  plenty  of  useful  and  necessary 
things,  they  restrict  their  production,  hoping  thereby 
to  keep  wages  high.  The  bricklayers,  by  laying  only  a 
few  hundred  bricks  a  day,  are  making  houses  and  house- 
rent  artificially  dear.  The  transport  workers,  by  insisting 
upon  very  high  wages,  raise  fares  and  prevent  men 
abandoning  the  congested  portions  of  the  towns  for  the 
suburbs.  The  coal-miners,  by  limiting  their  output, 
are  making  coal  scarce  and  dear.  Clothes,  boots,  hats, 
furniture,  etc.,  are  also  made  scarce  and  dear  by  a  mis¬ 
taken  policy  of  restricting  output.  The  dearness  of  things 


568 


LABOUR  UNREST  :  THE  CAUSES 


does  not  matter  very  much  as  long  as  they  are  produced, 
in  plenty,  but  their  scarcity  causes  suffering  to  the  masses, 
whether  wages  are  high  or  low. 

Believing  that  a  limited  output  serves  “  to  spread  the 
work  ”  and  ensures  high  prices  and  therefore  high  wages, 
many  trade  unions  are  hostile  not  only  to  speeding  up, 
but  even  to  labour-saving  improvement  in  production, 
to  newer  and  more  efficient  machinery  which  would 
diminish  the  laboriousness  of  the  workers’  task.  The 
unwisdom  of  this  policy  was  very  tellingly  pointed  out  by 
President  Hadley  of  Yale  University  as  follows : 

They  see  that  the  different  workmen  in  an  industrial 
community  compete  with  one  another ;  they  fail  to  see  that 
they  consume  one  another’s  products.  In  consequence 
of  this  one-sided  view,  they  favour  almost  any  policy 
that  reduces  the  intensity  of  competition  among  workmen 
as  producers,  even  though  it  may  ultimately  reduce  the 
amount  of  wealth  that  can  be  divided  among  the  workmen 
as  consumers.  .  .  . 

The  economy  of  the  introduction  of  a  machine  consists, 
not  in  making  the  old  product  at  less  expense,  and  with 
less  labour,  but  in  making  a  much  larger  product  with  the 
same  labour.  What  is  called  labour-saving  machinery 
is  in  fact  not  labour-saving,  but  product-making.  It  can 
only  become  profitable  by  meeting  the  wants  of  the  com¬ 
munity  as  a  whole,  and  not  those  of  a  few  rich  men.  .  .  . 

If  an  improvement  enables  the  same  number  of  labourers 
to  produce  twice  the  amount  of  useful  products,  it  may 
happen  that  the  price  of  each  product  will  fall  one-half. 
In  this  case  there  is  no  apparent  gain  in  private  wealth ; 
but  if  the  article  is  a  really  useful  one,  there  is  a  great  gain 
in  public  wealth  and  social  well-being  through  its  increased 
abundance.  .  .  . 

The  gain  from  an  improvement  in  production  goes 
chiefly  to  those  who  consume  the  products  cheapened 
by  such  an  improvement.  If  an  improvement  in  pro¬ 
duction  is  of  such  a  character  as  to  cheapen  goods  used 
by  capitalists,  the  gain  in  such  a  case  goes  entirely  to  the 
rich.  If,  on  the  other  hand,  the  improvement  is  such  as 


LABOUR  UNREST:  THE  CAUSES 


569 


to  cheapen  products  used  by  the  labourer,  and  not  by  the 
capitalist,  the  gain  goes  entirely  to  the  labourer.  Modern 
improvements  belong  chiefly  to  the  latter.  .  .  . 

When  the  invention  of  the  railroad  enabled  one  man  to 
do  work  which  formerly  required  a  hundredand  a  thousand 
hands,  it  was  supposed  that  the  demand  for  labour  in 
moving  goods  and  passengers  would  be  greatly  diminished. 
But  the  railroad  system  employs  far  more  labourers  in 
proportion  to  the  population  than  were  employed  on  roads 
in  the  old  days. 

The  fact  that  the  increase  of  output  is  of  the  greatest 
benefit  to  the  working  masses  is  obvious  to  every  practical 
business  man.  Mr.  Carnegie  wrote  in  his  Gospel  of  Wealth  : 

If  there  be  in  human  history  one  truth  clearer  and  more 
indisputable  than  another,  it  is  that  the  cheapening  of 
articles,  whether  of  luxury  or  of  necessity  or  of  those 
classed  as  artistic,  ensures  their  more  general  distribution, 
and  is  one  of  the  most  potent  factors  in  refining  and  lifting 
people  and  in  adding  to  its  happiness.  .  .  . 

Cheapness  is  in  proportion  to  the  scale  of  production. 
To  make  ten  tons  of  steel  a  day  would  cost  many  times 
as  much  per  ton  as  to  make  one  hundred  tons;  to  make 
one  hundred  tons  would  cost  double  as  much  per  ton  as 
a  thousand;  and  to  make  one  thousand  tons  per  day 
would  cost  greatly  more  than  to  make  ten  thousand  tons. 
Thus,  the  larger  the  scale  of  operation,  the  cheaper  the 
product.  The  huge  steamship  of  twenty  thousand  tons 
burden  carries  a  ton  of  freight  at  less  cost,  it  is  stated, 
than  the  first  steamships  carried  a  pound. 

Lord  Leverhulme  wrote  in  his  book  The  Six-Hour 
Day  : 

The  hand-loom  cotton-spinners  in  Lancashire  declared, 
when  Crompton  and  Arkwright  made  their  discoveries 
which  have  resulted  in  the  present  basis  of  cotton-spinning, 
that  they  were  being  ruined;  and  some  of  these  men 
took  extreme  measures  and  smashed  the  models  of  these 
inventors.  In  Samuel  Crompton’s  house  you  can  be 
shown  the  hole  in  which  Crompton  had  to  bury  his  model 
of  his  machine  from  his  own  class,  his  own  fellow- workmen 


570 


LABOUR  UNREST:  THE  CAUSES 


living  in  cottages,  his  neighbours,  who,  if  they  could 
have  got  at  it,  would  have  smashed  it  to  pieces.  What 
was  the  fact  at  that  time  ?  Before  the  inventions  of 
Crompton  and  Arkwright  there  were  only  8,000  cotton 
operatives  in  all  England,  and  no  associated  trades  to 
speak  of  going  with  them.  Of  course,  I  am  not  including 
in  that  the  wife  who  did  a  little  bit  of  spinning  for  her 
family  at  home,  as  most  farmers’  wives  did.  Twenty  - 
seven  years  after  these  machines  had  come  into  operation 
— these  machines  that  these  men  wanted  to  break  up — 
there  were  300,000  workmen  engaged  and  wages  had 
advanced.  Eighty  years  later  wages  had  still  further 
advanced,  and  there  were  800,000  men  engaged  in  England 
in  the  cotton  industry,  and  to-day  wages  are  higher  than 
ever,  and  including  the  associated  trades  that  go  with 
cotton-spinning — such  as  calico-printing  and  the  making 
of  the  machinery — it  is  estimated  that  not  less  than  two 
and  a  half  millions  of  people  are  engaged  in  the  cotton 
industry  in  this  kingdom. 

The  workmen  have  been  hostile  to  innovation,  and 
especially  to  labour-saving  machinery,  since  the  earliest 
time.  Probably  the  workers  of  the  Stone  Age  protested 
when  knives  and  axes  made  of  chipped  flints  were  being 
replaced  by  cutting  implements  made  of  bronze.  Happily 
the  workers  have  not  succeeded  hitherto  in  bringing 
civilisation  to  a  standstill  by  opposing  the  introduction 
of  improvements  in  manufacturing  by  restricting  output. 
Had  they  succeeded,  the  world  might  still  be  in  the  Stone 
Age. 

The  Six-Hour  Day. 

The  efficiency  of  the  workers  suffers  if  the  working 
hours  are  too  long,  especially  if  intense  application  is 
needed.  The  demand  for  the  reduction  of  working  hours 
to  eight,  or  seven,  or  six  a  day  springs  partly  from  the 
desire  to  avoid  overtiredness,  partly  from  the  wish  to  have 
more  leisure,  partly  from  the  desire  to  “  make  work,” 
to  keep  output  low  and  money  wages  high.  Some  agita- 


LABOUR  UNREST:  THE  CAUSES 


571 


tors  and  labour  leaders  talk  glibly  of  a  working  day  of 
considerably  less  than  six  hours.  For  instance,  a  four- 
hours’  working  day  has  been  recommended.  Of  course, 
there  is  a  limit  to  which  working  hours  can  be  reduced. 
Their  overgreat  reduction  may  increase  the  efficiency, 
health,  and  strength  of  the  workers  very  greatly  and  give 
them  plenty  of  time  for  leisure,  study,  and  so  forth.  But 
if  the  overgreat  reduction  of  working  hours  should  lead 
to  a  corresponding  diminution  of  output,  there  will  be 
general  scarcity  and  the  working  classes  will  suffer.  The 
idea  of  the  six-hour  working  day  was  started  by  Lord 
Leverhulme.  Every  demand  for  a  reduction  of  the  work¬ 
ing  hours  to  six  per  day  on  the  part  of  the  workers  is 
accompanied  by  appealing  to  his  authority.  That  appeal 
is  frequently  quite  unjustified,  for  Lord  Leverhulme  was 
very  careful  not  to  recommend  the  general  introduction 
of  the  six-hour  day.  On  the  contrary,  he  declared  such 
a  reduction  “  absolutely  impossible  and  impracticable.” 
He  stated  in  his  book : 

The  adoption  simultaneously,  in  all  industries  of  the 
United  Kingdom,  of  a  six-hour  working  day  is  absolutely 
impossible  and  impracticable.  ...  It  can  only  be 
adopted  in  such  industries  as  those  in  which  it  will,  by 
its  application,  give  lower  costs  of  production  by  working 
machinery  for  longer  hours  and  humanity,  in  two  or  more 
shifts,  for  fewer  hours.  The  six-hour  day,  for  instance, 
is  not  immediately  applicable  to  agriculture,  because 
at  present  there  is  little  labour-saving  machinery  used 
in  agriculture. 

Professor  Hadley  pointed  out  the  danger  in  reducing 
the  working  hours  as  follows : 

No  international  arrangements  or  protective  tariffs 
will  make  one  loaf  of  bread  serve  the  purpose  of  two. 
An  eight-hour  law  either  applies  to  agriculture,  or  it  does 
not.  If  it  applies  to  agriculture,  it  will  make  food  pro¬ 
ducts  scarce.  ...  If,  on  the  other  hand,  the  eight-hour 


572 


LABOUR  UNREST:  THE  CAUSES 


law  does  not  apply  to  agriculture  ...  we  shall  have  more 
labourers  competing  for  the  city  work,  and  more  supplies 
of  manufactures  to  exchange  for  food.  We  shall  see  a 
larger  number  of  labourers  working  at  starvation  rates. 

Nations  can  grow  prosperous  only  through  high  pro¬ 
duction.  Prosperity  cannot  be  created  among  the 
workers  by  reducing  output,  either  by  antagonising 
machinery,  or  by  reducing  working  hours,  or  by  taxing 
the  capitalists. 

The  Nationalisation  of  Industries. 

Men  are  easily  fascinated  by  sonorous  polysyllabic 
words  derived  from  the  Greek  or  Latin,  such  as  socialisa¬ 
tion  or  nationalisation.  In  the  eyes  of  many  nationalisa¬ 
tion  is  the  panacea  for  all  industrial  troubles.  Those 
who  call  most  loudly  for  the  nationalisation  of  mines, 
railways,  etc.,  are,  as  a  rule,  unaware  that  nationalisation 
means  bureaucratic  government,  if  not  bureaucratic 
absolutism.  Hence  many  demand  with  the  same  breath 
the  nationalisation  of  the  principal  industrial  undertakings 
and  the  abolition  of  all  Government  control  over  industry, 
and  condemn  officialdom  as  loudly  as  capitalism. 

It  is  perhaps  of  secondary  importance  to  the  nation 
whether  the  great  economic  undertakings,  such  as  rail¬ 
ways,  mines,  banks,  etc.,  are  owned  by  the  State  or  by 
individual  capitalists ;  but  it  is  of  the  very  greatest  impor¬ 
tance  that  the  enterprises  whereby  the  people  live  are 
well  managed,  for  we  live  in  a  competitive  world.  To 
many  the  State  is  a  vague,  omnipotent  force.  In  reality 
it  consists  on  the  administration  side  of  a  number  of  more 
or  less  narrow-minded  officials  who  are  out  of  touch  with 
the  realities  of  life,  for  confinement  in  a  Government 
office  cramps  men’s  views. 

The  War  has  glaringly  displayed  the  inefficiency  of  the 


LABOUR  UNREST  :  THE  CAUSES 


573 


bureaucratic  machine.  In  all  the  combatant  countries 
the  bureaucrats  had  to  be  replaced  by  able  business  men. 
The  credit  of  bureaucracy  has  been  greatly  diminished. 

Those  who  advocate  the  nationalisation  of  the  principal 
industries  often  use  Germany  as  a  model.  Indeed,  of  all 
the  nations  which  have  tried  the  experiment  of  national¬ 
isation,  Germany  alone  has  been  successful.  Her  example 
is  the  exception  which  confirms  the  rule  that  Government 
officials  are  unfit  for  managing  industrial  enterprises. 
The  relative  success  of  Imperial  Germany  in  the  field  of 
State-managed  enterprise  was  due  to  the  peculiar  character 
of  the  nation  and  of  its  Government.  The  bureaucratic 
career  was  practically  the  only  way  to  power.  All  the 
great  statesmen  of  Prusso-Germany,  from  Stein  and 
Hardenberg  to  Bismarck,  Bulow  and  Bethmann-Hollweg, 
came  from  the  ranks  of  the  bureaucracy.  While  the 
ablest  men  in  bureaucratic  autocracies  join  the  Civil 
Service,  the  ablest  men  in  free  democracies  usually  go  into 
politics,  business,  or  the  law,  leaving  the  bureaucratic 
career  to  the  least  gifted.  Besides,  Germany’s  compara¬ 
tive  success  in  nationalisation  was  due  to  the  submissive¬ 
ness  of  a  well-drilled  people  which  patiently  tolerated  the 
bureaucratic  absolutism  of  its  rulers. 

Bismarck,  who  sprang  from  the  ranks  of  the  bureau¬ 
cracy,  expressed  a  profound  contempt  for  the  narrow¬ 
mindedness,  sleepiness,  stupidity,  obstinacy,  and  clumsy 
interference  of  the  all-powerful  bureaucrats.  He  wrote 
to  his  father  on  September  29,  1838: 

I  have  often  seen  how  well-paid  officials  waste  time  and 
labour  in  such  a  way  that  one  might  think  that  the  nation 
existed  for  their  benefit,  not  they  for  the  service  of  the 
nation.  The  supreme  authorities  try  to  combat  the  evil, 
but  they  fail  because  they  cannot  overcome  the  spirit 
of  our  administration. 

On  April  19,  1871,  he  stated  in  the  Reichstag: 


574 


LABOUR  UNREST:  THE  CAUSES 


If  I  look  into  the  future  I  am  filled  with  dismay  and 
fear  lest  the  spirit  of  the  nation  should  be  destroyed  by 
the  boa-constrictor  of  the  bureaucracy. 

On  December  12,  1891,  he  said  to  a  deputation  of 
business  men : 

Who  are  the  people  who  have  made  all  these  wretched 
changes  and  regulations  ?  High  permanent  officials,  men 
who  are  merely  consumers,  men  who  neither  sow  nor  reap, 
men  who  do  not  feel  where  the  shoe  pinches.  Wherever 
we  look  we  suffer  from  the  disease  of  bureaucracy. 

Dozens  of  similar  expressions  might  easily  be  given. 
For  executive  and  administrative  duties  which  require 
initiative  and  common  sense,  Bismarck  preferred  business 
men  to  Government  officials,  as  he  frequently  stated. 
Bismarck’s  views  are  supported  by  high  American 
authorities.  Professor  Hadley  wrote: 

The  man  who  is  in  the  habit  of  looking  at  indirect 
consequences  .  .  .  will  be  disinclined,  except  as  a  last 
resort,  to  put  the  business  into  the  hands  of  a  Government 
whose  agents  are  almost  always  chosen  on  other  grounds 
than  those  of  industrial  efficiency,  and  whose  methods 
are  much  less  flexible  than  those  of  a  private  corporation  . 
He  will  be  indisposed  to  see  stringent  regulations  put  in 
force  until  he  is  convinced  that  milder  remedies  are 
inadequate  to  protect  the  interests  of  the  public  as  a 
whole.  .  .  . 

Only  where  the  traditions  of  the  Civil  Service  are  such 
that  the  best  men  of  the  country  seek  and  gain  admission  to 
it,  independent  of  party,  can  we  hope  that  the  advan¬ 
tages  from  Government  management  of  these  industries 
might  outweigh  the  evils.  So  long  as  an  administra¬ 
tion  is  to  any  considerable  degree  swayed  by  partisan 
considerations  instead  of  industrial  ones,  every  extension 
of  Government  activity  to  new  fields  must  be  regarded 
with  grave  apprehension. 

Mr.  Carnegie  wrote  in  his  book  Problems  of  To-day: 

All  that  the  millionaire  can  get  out  of  life  is  superior 
food,  raiment,  and  shelter.  Only  a  small,  a  very  small, 


LABOUR  UNREST :  THE  CAUSES 


575 


percentage  of  all  his  millions  can  be  absolutely  wasted. 
When  the  socialist,  therefore,  speaks  of  all  wealth  going 
back  to  the  State,  he  proclaims  no  great  change  in  its 
mission.  The  state,  sole  owner,  would  use  it  just  as  the 
owners  now  use  all  but  a  fraction  of  it;  that  is,  invest  it  in 
some  of  the  multiform  ways  leading  to  the  reward  of 
labour.  It  is  simply  a  question  whether  State  as  against 
individual  control  of  wealth  would  prove  more  productive 
which,  judging  from  experience  of  State  and  individual 
management  so  far  as  yet  tested,  may  gravely  be  doubted. 

The  most  successful  Government  undertakings  in 
Germany  were  the  railways,  the  telegraphs,  and  the 
telephone  system.  They  were  ably  managed,  but  they 
were  far  inferior  to  those  of  the  United  States.  The 
American  private  railways,  telegraphs,  and  telephones  are 
by  far  the  most  highly  developed  and  the  most  efficient 
in  the  world. 

The  bureaucratic  control  of  industry  has  everywhere 
been  a  failure.  A  number  of  Governments  have  secured 
for  themselves  a  monopoly  in  manufacturing  and  selling 
tobacco  and  matches,  commodities  which  are  made 
largely  by  unskilled  labour,  t  The  business  is  a  compara¬ 
tively  simple  one.  Yet  all  those  who  have  travelled  in 
France  and  in  Italy,  where  the  Government  manufactures 
tobacco  and  matches,  have  found  both  absolutely  atrocious. 
A  French  paper,  The  Atlas ,  wrote  in  April,  1914,  with 
regard  to  the  French  tobacco  monopoly : 

The  smoker  is  obliged  to  accept  with  his  eyes  shut  and 
his  purse  open  everything  the  State  sells  him.  If  the 
quality  is  always  the  same — that  is  to  say  inferior — prices 
are  always  on  the  increase. 

The  French  paper  Excelsior  of  June  3,  1914,  said: 

Smokers  who  have  complained  of  finding  in  their 
packets  of  superior  cut  tobacco  or  of  “  Caporal  Ordinaire  ” 
a  sock,  a  glove,  a  nail,  a  dead  mouse,  or  other  foreign  but 


576 


LABOUR  UNREST:  THE  CAUSES 


unsmokeable  ingredients,  and  those  who  complain  of 
getting  empty  cigarette-boxes,  or  boxes  not  containing 
the  quantity  stated  on  the  outside,  may  now  be  reassured. 
We  are  informed  that  at  Issy-les-Moulineux,  where 
already  some  means  of  control  of  doubtful  efficacy  have 
been  tried,  an  infallible  but  secret  procedure  has  been 
adopted  which  will  make  it  possible  to  trace  easily  defec¬ 
tive  products. 

Experience  has  proved  that  efficiency  and  bureaucratic 
control  do  not  go  together.  Private  undertakings  are 
more  efficient  than  those  under  bureaucratic  direction, 
because  free  competition  mercilessly  eliminates  the 
incapable.  Business  men  become  prominent  by  the 
same  means  by  which  race-horses  or  boxers  come  to  the 
front,  by  proved  ability.  Promotion  in  the  Civil  Service 
goes  chiefly  by  seniority.  While  private  enterprise 
automatically  eliminates  the  unfit,  bureaucratic  manage¬ 
ment  automatically  promotes  them. 

The  essence  of  all  business  is  progress.  The  essence  of 
bureaucracy  is  conservatism,  the  strict  observation  of 
forms  and  precedence  and  hostility  to  progress.  The 
Army  Clothing  Factory  and  Woolwich  Arsenal  were  in  1914 
distinguished  by  their  antiquated  outfit  and  general 
inefficiency. 

Those  who  rail  at  private  enterprise  might  reflect 
upon  the  fact  that  the  old  Governmentalism  fell  a  little 
more  than  a  century  ago.  Under  individualism,  under 
the  much-abused  capitalist  regime,  the  world  has  far  more 
rapidly  advanced  scientifically,  economically,  and  politi¬ 
cally  than  during  the  two  thousand  years  preceding. 
The  omnipotent  state  which  Rome  introduced  into  the 
world  created  everywhere  stagnation  and  decline.  During 
and  owing  to  the  capitalist  regime  the  workers  have  passed 
from  slavery  to  independence,  from  misery  to  comfort. 
The  modern  world  has  been  created,  not  by  Govern¬ 
mentalism,  not  by  bureaucracy,  not  by  the  successors 


LABOUR  UNREST:  THE  CAUSES 


577 


of  the  Procuraiores  of  ancient  Rome,  but  by  individual 
enterprise,  which  became  unshackled  about  the  time  of 
the  French  Revolution,  largely  owing  to  the  teachings  of 
Adam  Smith.  It  would  be  retrogression  to  fetter  the 
nation  once  more  and  to  place  all  its  living  energies  under 
the  dead  hand  of  officialdom. 

A  number  of  agitators  and  of  labour  leaders  have 
succeeded  in  persuading  large  masses  of  the  workers  that 
they  produce  all  the  wealth;  that  they  ought,  therefore, 
to  possess  all  the  wealth  and  to  enjoy  it;  and  that  they 
ought  to  have  all  the  power  of  the  State  as  well.  They 
have  succeeded  in  persuading  large  masses  of  the  workers 
that  they  can  very  greatly  increase  their  prosperity  by 
producing  less,  by  working  fewer  hours,  and  by  insisting 
upon  very  greatly  increased  wages  paid  in  respect  of 
greatly  reduced  output.  They  have  succeeded  in  per¬ 
suading  them  that  the  able  organiser  of  industry,  the  capi¬ 
talists,  the  employers,  who  have  created  modern  industry, 
are  their  deadly  enemies;  that  the  workers  can  create 
a  new  heaven  and  a  new  earth  by  abolishing  capitalism 
root  and  branch,  and  by  handing  over  the  management  of 
industry  to  the  omnipotent  State,  which,  it  is  true,  can 
print  unlimited  quantities  of  bank-notes,  which  simple- 
minded  people  mistake  for  wealth.  According  to  certain 
labour  leaders,  the  advent  of  Socialism,  which  merely 
means  bureaucratic  management,  will  create  general 
prosperity  and  satisfaction  among  the  workers.  There 
will  be  a  paradise  upon  earth  in  which  perfect  harmony 
reigns  between  the  directors  of  industry  and  the  working 
masses. 

Recent  events  in  England  and  elsewhere  have  shown 
that  nationalisation  is  no  remedy  for  labour  disputes; 
that  men  employed  by  the  State  or  by  the  Local  Authori¬ 
ties  will  go  on  strike  as  readily  as  men  in  private  employ¬ 
ment.  Nationalisation  will,  therefore,  not  abolish  the 


578 


LABOUR  UNREST:  THE  CAUSES 


differences  between  the  employers  and  the  employed. 
Nor  will  it  provide  abundance  if  the  workers,  continue 
their  policy  of  limiting  output  and  increasing  wages,  a 
policy  which,  if  pursued  to  its  logical  conclusion,  will 
provide  them  with  basketfuls  of  bank-notes,  but  with 
little  food,  fuel,  and  clothing.  After  all,  bits  of  printed 
paper  are  not  wealth. 

Certain  leaders  have  taught  the  working-men  that 
they  can  produce  general  prosperity  and  contentment, 
not  by  increased  production,  but  by  the  gradual,  or  by 
the  sudden,  destruction  of  the  existing  order  of  society. 
That  is  a  very  dangerous  teaching.  If  the  abolition  of 
private  capitalism,  either  by  legal  process  or  by  violent 
means,  should  be  undertaken  and  should  fail  to  give  the 
workers  increased  prosperity  in  return  for  reduced  work ; 
if  the  nationalisation  of  industries  should  bring  about 
general  poverty,  want,  and  dissatisfaction,  as  is  to  be 
anticipated,  their  misguided  leaders  will,  of  course,  not 
admit  that  their  policy  of  destruction  has  been  mistaken, 
but  they  will  blame  the  managing  bureaucracy  for  the 
sufferings  of  the  people,  and  hold  up  to  odium  the  govern¬ 
ing  officials  and  reproach  them  for  their  incapacity  and 
ill-will.  The  consequence  may  be  extremely  serious. 
The  people,  roused  to  fury  by  their  sufferings  and  their 
disappointment,  may  proceed  to  destroy  the  power  which 
they  have  put  into  the  place  of  the  capitalists.  If,  as  is 
to  be  anticipated,  the  nationalisation  of  industries  should 
lead  to  administrative  chaos,  general  under-production, 
and  economic  ruin,  the  nation  would  probably  drift  into 
anarchism  and  civil  war.  The  introduction  of  nationalisa¬ 
tion  may  lead  not  only  to  economic  disaster,  but  to 
political  disaster  as  well. 

The  policy  of  organised  labour  has  been  mistaken 
throughout.  The  nation  seems  to  be  drifting  towards 
the  breakers.  However,  there  is  no  reason  to  despair. 


LABOUR  UNREST:  THE  CAUSES 


579 


In  the  following  chapter  I  shall  endeavour  to  show  that  it 
is  possible  to  create  permanent  harmony  and  co-operation 
between  capital  and  labour,  two  forces  which  at  present 
seem  irreconcilable ;  that  it  is  possible  to  alter  completely 
and  permanently  the  character  and  policy  of  organised 
labour;  that  before  long  the  advocates  of  the  44  class 
war  ”  may  find  their  occupation  gone  for  ever. 


CHAPTER  XXV 


LABOUR  UNREST:  ITS  CAUSES  AND  ITS  PERMANENT 

CUR  E — Continued . 

II.  The  Cure.* 

There  can  be  no  peace  and  no  contentment  in  the  labour 
world  unless  the  workers  are  prosperous.  Prosperity 
means  an  abundance  of  the  useful  and  necessary  things 
which  men  require  or  desire,  means  high  consumption, 
and  high  consumption  is  impossible  unless  there  is  high 
production.  The  necessaries,  conveniences,  and  luxuries 
which  the  people  require  can  be  provided  only  by  inten¬ 
sive  production.  Various  factors  at  present  impede  the 
intensive  production  which  is  needed. 

Hitherto  the  British  workers  have  favoured  time  wages, 
wages  which  are  based  upon  the  time  spent  in  working, 
not  wages  based  upon  the  quantity  of  goods  produced 
by  them.  In  most  callings  time  wages  have  a  great 
disadvantage  if  compared  with  piece  wages.  They  tend 
to  keep  production  low  and  to  cause  friction  between  the 
workers  and  the  management.  Professor  Hadley,  of 
Yale  University,  wrote  in  his  excellent  book  Economics: 

Under  the  system  of  time  wages  the  workman  has  no 
immediate  or  obvious  incentive  to  increase  his  output. 
A  large  part  of  the  time  and  strength  of  the  foreman  is 
occupied  in  keeping  the  men  under  his  charge  up  to  a 
proper  standard  of  efficiency.  To  avoid  this  difficulty,  the 
introduction  of  piece  wages  is  the  most  obvious  expedient  . 

*  From  The  Nineteenth  Century  and  After ,  June,  1919, 

580 


LABOUR  UNREST:  THE  CURE 


5S1 


The  views  of  Professor  Hadley  are  held  by  the  great 
majority  of  manufacturers  and  of  independent  investi¬ 
gators  both  in  the  United  States  and  in  England.  For 
instance,  the  Report  of  the  Departmental  Committee 
appointed  by  the  Board  of  Trade  to  consider  the  Position 
of  the  Iron  and  Steel  Trades  after  the  War,  published  in 
1918,  stated: 

The  method  of  remuneration  of  labour  must  depend 
intimately  upon  the  conditions  peculiar  to  an  occupation. 
Broadly,  the  Committee  favour  a  method  which  will 
directly  and  immediately  interest  the  workman  in  the 
results  of  his  labour.  Piece  or  tonnage  rates  should 
be  paid  to  all  classes  of  workmen  whenever  possible,  and 
the  Committee  recommend  the  establishment  of  a  National 
Joint  Board,  representative  both  of  employers  and 
workmen  in  trades  where  this  system  does  not  exist,  to 
consider  and  to  advise  as  to  the  appropriate  methods  of 
putting  this  system  into  operation  in  various  districts 
and  trades.  Evidence  has  been  given  to  show  that 
the  best  results  have  been  obtained  where  wages  rates 
have  been  regulated  upon  a  sliding  scale  based  on  the 
ascertained  selling  prices  of  products. 

Guided  by  their  mistaken  policy  of  keeping  production 
low,  many  trade  unionists  have  hitherto  determinedly 
opposed  the  introduction  of  piece  wages.  The  Report 
of  the  Departmental  Committee  appointed  by  the  Board 
of  Trade  to  Consider  the  Position  of  the  Engineering 
Trades,  published  in  1918,  contains  the  following  signifi¬ 
cant  statement  of  fact  and  recommendation : 

In  order  to  enable  the  expert  workman  to  earn  during 
the  best  years  of  his  life  the  maximum  possible  return, 
it  would  seem  that  piece  work,  or  a  bonus  system  on  time 
work,  ought  to  be  the  foundation  as  far  as  possible  of  all 
employment. 

The  trade  unions  have  in  the  past  been  very  reluctant 
to  admit  piece  rates.  Indeed,  even  now  some  of  the 
unions  forbid  their  members  to  accept  piece  rates  where 

38 


582 


LABOUR  UNREST:  THE  CURE 


these  have  not  previously  been  in  force,  and,  where  piece 
work  has  been  started,  the  members  are  asked  to  dis¬ 
courage  it  as  much  as  possible.  It  has  also  been  evidenced 
to  us  that  cases  have  occurred  wherein,  should  the  men 
earn  more  than  time  and  a  third,  they  have  been  fined 
by  their  Union.  .  .  . 

In  the  future  it  will  be  all-important  that  output  should 
be  encouraged  to  its  maximum. 

Organised  labour  has  hitherto  favoured  payment  by 
time,  and  has  discountenanced  payment  by  the  piece, 
partly  owing  to  the  mistaken  belief  that  there  was  only 
a  certain  quantity' of  work  and  no  more,  that  to  avoid 
unemployment  it  was  in  the  best  interest  of  the  workers 
to  “  spread  ”  the  limited  quantity  of  work  existing  among 
the  largest  number ;  partly  because  the  workers  had  been 
taught  that  the  interests  of  capital  and  labour  are  not 
identical,  but  are  antagonistic  and  irreconcilable;  that 
the  capitalists  were  their  enemies ;  that  the  workers  would 
benefit  themselves  by  damaging  the  employers’  interests, 
partly  because  many  of  the  workers  prefer  leisurely  work 
to  intensive  application  and  exertion. 

It  is  obvious  that  the  workers  will  no  longer  oppose 
high  production,  that  they  will  no  longer  oppose  the 
introduction  of  piece  wages  and  of  improved  organisation 
and  machinery,  and  that  they  will  no  longer  endeavour 
to  reduce  unreasonably  the  number  of  working  hours, 
if  they  become  convinced  that  that  policy  is  disadvan¬ 
tageous  to  themselves,  and  especially  if  they  should 
become  personally  and  very  strongly  interested  in  high 
output,  in  economy  of  production.  As  soon  as  their 
interests  have  become  identical  with  those  of  their 
employers,  they  will  insist  upon  intensive  production  and 
the  highest  administrative  and  technical  efficiency.  A 
real  partnership  must  be  created  between  capital  and 
labour.  Until  the  interests  of  employers  and  employed 
have  become  one  and  indivisible,  the  workers  will,  of 


LABOUR  UNREST:  THE  CURE 


583 


course,  continue  to  demand  the  maximum  pay  in  return 
for  the  minimum  of  effort. 

Hitherto  the  workers  have  been  interested  almost 
exclusively  in  the  amount  of  their  weekly  pay.  They  will 
take  a  lively  and  very  intelligent  interest  in  the  factory 
in  which  they  are  employed  as  soon  as  they  begin  to  feel 
that  they  are  full  partners  in  the  concern,  and  that  their 
welfare  is  bound  up  with  its  efficiency  and  success.  How 
such  an  identity  of  interest  might  be  created  between 
capital  and  labour,  between  employers  and  employed, 
will  presently  be  shown. 

Efficiency  of  modern  production  requires  not  only  the 
use  of  the  most  perfect  and  of  the  most  powerful  machinery 
and  the  application  of  science  to  industry,  but  requires, 
before  all,  the  elimination  of  unnecessary,  and  therefore 
purely  mischievous,  cut-throat  competition,  the  dis¬ 
appearance  of  small,  old-fashioned,  and  therefore  wasteful, 
installations  and  organisations — requires  production  on 
the  largest  possible  scale.  Co-operation  and  concentra¬ 
tion  of  effort  are  more  powerful  factors  than  competition. 
Organised  co-operation  on  the  largest  scale  makes  for 
efficiency,  excellence,  and  cheapening  of  production, 
while  internecine  competition  among  a  large  number  of 
isolated  firms  leads  to  the  dissipation  of  effort,  waste, 
dearness,  and  general  confusion.  The  fear  that  the 
elimination  of  small  independent  concerns  will  inevitably 
lead  to  an  absolute  monopoly  of  a  single  organisation 
which  will  hold  the  nation  to  ransom  is  scarcely  confirmed 
by  experience.  The  modern  tendency  of  consolidation 
leads  as  a  rule,  not  to  the  establishment  of  a  single  gigantic 
co-operation,  but  to  that  of  a  few.  Corporations  of  very 
large  size  will  not  readily  abuse  their  position,  for 
abuse  of  power  on  the  part  of  a  gigantic  concern  is 
suicidal.  It  leads  inevitably  to  the  rise  of  competition, 
which  will  undersell  and  destroy  the  short-sighted 


584 


LABOUR  UNREST:  THE  CURE 


corporation  which  wishes  to  exploit  the  public,  and, 
furthermore,  it  is  bound  to  lead  to  Government  inter¬ 
ference.  Universal  experience  has  shown  that  large 
corporations  can  preserve  their  position  only  if  they  follow 
the  policy  of  discouraging  the  rise  of  dangerous  com¬ 
petitors  by  the  cheapness  and  excellence  of  their  produc¬ 
tions  and  services,  and  if  they  make  Government  inter¬ 
ference  impossible  by  preventing  complaints,  by  treating 
the  public  with  the  most  scrupulous  honesty  and  fairness. 

Consolidation  in  industry  and  commerce  leads  as  a 
rule,  not  to  the  establishment  of  a  single  monopoly  and 
the  complete  disappearance  of  competition,  but  to  the 
rise  of  a  few  giant  concerns  which  keenly  compete  with 
one  another.  Professor  Hadley  wrote  in  his  book 
Economics: 

It  is  commonly  assumed  that  the  more  competitors 
you  have,  the  greater  will  be  the  intensity  of  competition. 
But  in  actual  experience  there  is  no  conqpetition  in  the 
world  so  intense  as  that  which  prevails  between  two 
highly  organised  bodies  that  stand  opposed  to  one  another. 
In  the  old  days  of  small  concerns  there  was  much  more 
slackness  of  management,  and  much  larger  profit  per 
unit  of  product,  than  we  find  to-day.  It  is  proverbial 
that  the  largest  houses  can  make  the  closest  calculations 
in  selling  goods  at  a  slight  margin  above  expense;  and 
competition  is  generally  strong  enough  to  force  them  to 
make  these  calculations  closer  than  would  have  been 
deemed  possible  a  half-century  ago — in  other  words,  to 
keep  down  profits. 

President  Roosevelt,  the  enemy  of  extortion  and  of 

«/ 

abuse  of  power  on  the  part  of  the  American  Trusts,  and 
the  friend  of  labour  and  of  the  “  square  deal  ”  in  industry, 
wrote  in  his  last  work,  The  Foes  of  Our  Own  Household , 
published  in  September,  1917: 

Big  work  can  only  be  done  by  big  business,  and  Govern¬ 
ment  must  courageously  but  intelligently  control  big 
business. 


LABOUR  UNREST:  THE  CURE 


585 


See  that  labour  is  paid  a  first-class  wage,  and  then  that 
it  gives  first-class  work  for  the  first-class  wage.  Exempt 
plain  food  and  plain  clothing  and  all  the  necessities  for 
simple  life  and  family  rearing  from  taxation .  Let  incomes 
bear  substantial  progressive  taxes,  but  not  on  the  basis 
of  class  envy ;  and  initiate  a  national  policy  of  heavy  pro¬ 
gressive  inheritance  taxes. 

So  much  for  the  immediate  needs  of  the  moment.  Let 
us  meet  them  instantly,  and  let  us,  furthermore,  begin 
to  secure  industrial  justice — the  square  deal — for  the 
future.  The  first  essential  is  to  rid  ourselves  of  the  cant 
and  hypocrisy  of  those  who,  usually  for  improper  political 
reasons,  seek  to  persuade  people  that  large-scale  business 
concerns,  including  the  so-called  trusts,  owe  their  growth 
to  the  tariff  or  to  governmental  corruption,  and  should 
be  destroyed,  not  controlled  in  the  public  interests.  The 
politicians  who  take  this  attitude  work  nothing  but 
mischief. 

Unlimited  cut-throat  competition  between  small  and 
weak  concerns  is  not  now  possible;  and,  if  possible,  it 
would  be  wholly  undesirable.  .  .  . 

We  must  face  the  fact  that  big  business  has  come  to 
stay,  and  that  it  cannot  be  abolished  in  any  great  nation 
under  penalty  of  that  nation’s  slipping  out  of  the  front 
place  in  international  industrialism.  During  the  quarter 
of  a  century  preceding  the  present  war,  England  slipped 
back  in  business  leadership  compared  to  Germany, 
precisely  because  in  Germany  they  were  beginning  to  do 
business  on  a  large  scale,  by  huge  combinations.  The 
vital  point  was  that  the  State,  when  necessary,  encouraged, 
and  at  the  same  time  supervised  and  controlled,  these 
big  combinations,  securing  justice  and  reasonably  fair 
treatment  among  capitalists,  managers,  salaried  experts, 
and  wage-workers,  all  of  whom  had  some  voice  in,  some 
control  of,  at  least  certain  parts  of  their  common  business. 

In  the  world  of  international  industry  the  future  belongs 
to  the  nation  which  develops  either  the  big-scale  busi¬ 
nesses,  or  else  the  ability  among  small-scale  business 
men,  working-men,  and  farmers,  to  co-operate,  to  work 
together  and  pool  their  resources  for  production,  distri¬ 
bution,  and  the  full  use  of  scientific  research ;  or  else,  what 
is  most  desirable,  develops  both  types  of  business.  The 


586 


LABOUR  UNREST:  THE  CURE 


small  individualistic  business  cannot  compete  in  any 
field  in  which  either  of  the  other  types  flourishes.  There¬ 
fore,  whether  we  like  it  or  not,  we  must  either  permit 
and  encourage  the  development  of  these  two  types  or 
fall  behind  other  nations,  as  Spain  once  fell  behind  England 
and  France. 

Our  duty  is  not  with  futile  obstinacy  to  try  to  stop  the 
new  movement,  but  to  guide  and  control  it;  to  encourage 
it,  and  yet  to  make  it  subservient  to  the  common  good. 
If  we  face  it  in  this  spirit,  we  shall  speedily  find  that  it 
is  far  from  representing  mere  evil.  On  the  contrary, 
it  is  precisely  the  strong,  wealthy,  prosperous  business 
concerns  which  can  afford  to  treat  their  working-men  as 
in  the  interest  of  the  commonwealth  it  is  imperative  that 
they  should  be  treated.  Only,  it  is  necessary  that  the 
Government  shall  possess  such  control,  shall  exercise 
such  supervision,  over  them  as  to  insure  the  use  of  their 
giant  and  prospering  strength  in  the  common  interest. 
It  would  be  as  unwise — even  if  it  were  possible — to  exter¬ 
minate  big  corporations  as  to  exterminate  big  labour 
unions.  But  it  is  eminently  wise  for  the  Government 
to  itself  make  the  people  a  partner  of  both,  to  supervise 
the  relations  of  each  to  the  other  and  of  both  to  the  general 
public,  and  gradually  to  substitute  the  principle  of  co¬ 
operation  for  that  of  devil-take-the-hindmost. 

I  would  draw  particular  attention  to  President  Roose¬ 
velt’s  words  “  make  the  people  a  partner.”  President 
Roosevelt  vaguely  felt  that  industry  based  upon  the 
wage  system  had  had  its  day,  that  it  would  be  necessary 
to  create  in  some  way  or  other  an  identity  of  interests 
between  capital  and  labour. 

In  most  cases  great  industrial  consolidations  lead  not 
to  a  single  monopoly.  Neither  the  huge  United  States 
Steel  Trust  nor  the  gigantic  Standard  Oil  Company 
possess  a  complete  monopoly.  However,  there  are 
industries,  such  as  the  transport  business,  in  which  the 
creation  of  a  single  and  complete  control  is  of  the  greatest 
benefit  to  the  public.  Professor  Hadley  wrote  in  his 
book  Economics: 


LABOUR  UNREST:  THE  CURE 


587 


The  attempt  to  have  two  independent  agencies  perform 
any  of  the  distributing  services  like  water,  gas,  telegraphs, 
or  railroads,  for  a  single  community  is  apt  to  result  in 
loss  to  the  producer  and  inconvenience  to  the  consumer. 
So  much  of  the  expense  of  delivery  of  water  or  gas  is 
connected  with  the  laying  of  mains  that  a  system  which 
duplicates  these  mains  is  a  public  burden.  So  much  of 
the  advantage  of  the  telephone  service  to  each  subscriber 
lies  in  the  power  of  reaching  all  the  other  subscribers  that 
the  existence  of  two  competing  exchanges  in  the  same 
city  destroys  the  usefulness  of  both.  In  railroad  trans¬ 
portation  a  single  organised  company  can  put  lines  just 
where  they  are  needed,  and  run  trains  at  the  time  when 
the  public  wants  them.  If  the  same  service  is  performed 
by  two  companies,  there  will  be  unnecessary  duplication 
of  lines  in  some  places,  and  failure  to  build  needful  ones 
in  others;  while  the  train  times  and  train  connections 
will  be  arranged,  not  with  regard  to  the  maximum  con¬ 
venience  of  the  public,  but  with  a  view  to  increase  the 
business  of  one  competitor  at  the  expense  of  the  other. 

Both  in  the  United  Kingdom  and  abroad  those  indus¬ 
tries  have  been  most  successful  and  most  prosperous  in 
which  organisation,  consolidation,  and  concentration  have 
been  brought  to  the  highest  perfection,  in  which  produc¬ 
tion  is  carried  on  on  the  most  gigantic  scale.  The  United 
States  Steel  Corporation  makes  more  iron  and  steel  than 
the  whole  of  the  United  Kingdom;  the  Ford  Company 
makes  more  motor-cars  than  the  whole  of  Europe;  the 
combination  of  American  typewriter  manufacturers  makes 
more  typewriting  machines  than  the  rest  of  the  world. 
Before  the  War  the  great  steel-makers  of  Germany  had 
formed  a  combination,  and  all  the  principal  chemical 
works  of  that  country  had  done  likewise.  Not  unna- 
naturally  British  iron-producers,  motor-car  manufacturers, 
typewriter-makers,  and  chemical  works,  felt  unable  to 
compete  successfully  with  such  gigantic  opponents,  which 
possessed  a  most  perfect  organisation  and  practically 
unlimited  funds,  which  were  used  both  for  trading 


588 


LABOUR  UNREST:  THE  CURE 


and  for  developing  the  scientific  side  of  industry.  It 
is  worth  noting  that  the  most  successful  British  indus¬ 
tries  are  those  in  which  concentration  has  been  carried 
farthest,  and  especially  those  which  have  fallen  under  a 
single  control,  which  have  virtually  become  trusts. 
Among  these  I  would  mention  the  great  Coats  cotton 
combine,  the  Wills  Imperial  Tobacco  Corporation,  and 
the  Lever  Soap  combine. 

Many  of  the  expert  Committees  which  were  appointed 
by  the  Board  of  Trade  and  the  Ministry  of  Reconstruction 
to  examine  the  position  of  the  principal  British  industries 
and  to  study  their  prospects  after  the  War  came  to  the 
conclusion  that  some  important  British  industries  had 
suffered  and  had  become  stagnant  largely  because  they 
were  carried  on  on  too  small  a  scale ;  that  production  on 
the  very  largest  scale  was  required;  that  the  rise  of 
gigantic  combinations  under  a  single  control  in  the  United 
States  and  in  Germany  compelled  Englishmen  to  abandon 
their  old-fashioned  methods  and  to  create  also  huge  up- 
to-date  concerns.  The  findings  of  the  various  Committees 
were  summarised  and  endorsed  as  follows  in  the  important 
and  most  interesting  Final  Report  of  the  Committee  on 
Commercial  and  Industrial  Policy  After  the  War: 

In  the  two  countries  which  have  become  our  principal 
competitors  in  the  world’s  markets — the  United  States 
and  Germany — and  in  a  lesser  degree  elsewhere,  industry 
and  trade  have  come  to  be  largely  controlled  either  by 
powerful  concerns,  frequently  resulting  from  the  con¬ 
solidation  of  a  number  of  undertakings  and  operating  on 
a  very  large  scale,  or  by  combinations  of  manufac¬ 
turers.  .  .  . 

The  individual  manufacturer  and  merchant  will  find  it 
increasingly  difficult  to  keep  abreast  of  technical  progress 
and  to  meet  effectively  the  competition  of  the  powerful 
foreign  consolidations  and  combinations  to  which  we  have 
referred,  operating  as  these  do  under  a  single  guidance 
and  with  great  financial  resources.  .  .  . 


LABOUR  UNREST:  THE  CURE 


589 


Combines  in  the  United  Kingdom  have  very  rarely 
reached  the  last  stage  indicated  above,  and  as  a  broad 
general  statement  it  may  be  said  that  they  have  as  a  rule 
been  formed  in  each  case  by  quite  a  small  number  of  firms 
engaged  in  the  production  of  a  narrowly  limited  class  of 
goods  (though  many  firms  and  companies  are  members 
of  numerous  combinations) ;  that  comparatively  few  have 
continued  for  any  considerable  period  of  time ;  that 
they  have  tended  to  limit  their  action  to  the  regulation 
of  prices;  and  that  their  activities  in  this  respect  in  any 
particular  branch  of  trade  have  on  the  whole  been  only 
intermittent.  .  .  . 

A  report  presented  to  the  United  States  House  of 
Representatives  in  1913  enumerated  over  two  hundred 
consolidations  of  varying  degrees  of  magnitude,  with  the 
result  that  a  very  large  portion  of  the  field  of  United 
States  industrial  production  is  dominated  by  powerful 
monopolist  or  quasi-monopolist  consolidations. 

In  Germany,  on  the  other  hand,  though  consolidations 
have  not  been  absent,  the  form  of  combination  which  has 
been  most  generally  adopted  and  has  come  to  cover  almost 
the  whole  field  of  German  industry  is  the  “  Cartel,”  a 
terminable  organisation  formed  primarily  for  the  regula¬ 
tion  of  prices  and  for  joint  marketing  abroad;  but  in  con¬ 
sequence  thereof  undertaking  (so  far  as  is  practicable  with 
companies  which  retain  a  substantial  measure  of  inde¬ 
pendence)  the  allocation  of  orders,  standardisation,  and 
the  concentration  of  individual  works  on  particular 
classes  of  products. 

It  is  noteworthy  that  very  few  combines  in  the  United 
Kingdom  have  done  more  than  aim  at  the  regulation  of 
prices ;  their  main  preoccupation  has  been  the  limitation 
of  competition. 

Having  pointed  out  that  the  disappointing  position 
of  many  British  industries  was  largely  due  to  the  fact 
that  many  small  manufacturers  working  in  isolation 
cannot  possibly  compete  with  large  and  very  large 
concerns  working  under  a  single  management,  that  such 
isolated  concerns  are  bound  to  go  under  if  pitted  against 
modern  giant  combinations  in  which  the  industries  of 


590 


LABOUR  UNREST:  THE  CURE 


entire  nations  are  united,  the  Committee  recommended 
the  formation  of  similar  combinations  in  the  United 
Kingdom.  It  declared  such  a  development  inevitable, 
and  equally  in  the  interest  of  capital  and  of  labour.  In 
well-weighed  and  impressive  sentences  it  recommended : 

We  are  of  opinion  that  if  this  country  is  to  maintain  its 
commercial  position  and  effectively  compete  for  its  share 
of  the  trade  of  the  world,  many  industries  must  be  organ¬ 
ised  on  modern  lines,  and  often  on  a  larger  scale  than  has 
been  the  case  in  past  years.  While  the  British  manu¬ 
facturer  was  often  first  in  the  field,  his  original  works  were 
laid  out  with  a  view  to  a  comparatively  small  output  as 
compared  with  what  he  is  turning  out  to-day,  and  he  now 
finds  it  no  longer  possible  to  work  economically  or  to  make 
adequate  extensions.  .  .  . 

The  establishment  of  joint  selling  organisations,  such 
as  are  suggested  by  the  various  Trade  Committees, 
involves  the  regulation  of  prices  and  some  control  of 
output.  .  .  . 

We  believe  that  such  development  is  not  only  desirable 
in  some  cases,  but  it  is  practically  inevitable  under  modern 
economic  conditions,  and  we  think  that  the  attitude  of 
public  opinion,  of  local  authorities,  and  of  the  State, 
which,  broadly  speaking,  has  hitherto  been  more  or  less 
avowedly  antagonistic  to  the  very  principle  of  combina¬ 
tion,  must  be  modified. 

Whilst  we  are  of  opinion  that  combinations  of  work¬ 
people  are  beneficial  to  industry  and  should  be  encouraged, 
we  also  think  that  the  interests  of  labour  will  not  only 
not  be  prejudiced,  but  will  derive  advantage  from  the 
encouragement  of  combinations  or  associations  of  em¬ 
ployers  on  the  lines  we  have  indicated.  Any  united  effort 
among  employers  which  results  in  increased  efficiency 
of  production,  or  in  the  better  and  more  economical 
distribution  and  marketing  of  the  products  of  machinery 
and  labour,  or  in  greater  financial  stability,  must  ulti¬ 
mately  be  for  the  benefit  of  the  worker,  as  calculated  to 
provide  a  wider  and  more  constant  market,  to  secure 
steadier  employment,  and  even  to  increase  the  demand 
for  labour. 


LABOUR  UNREST:  THE  CURE 


591 


Further,  experience  seems  to  prove  that,  so  far  from 
associations  of  employers  for  trade  purposes  adversely 
affecting  the  wages  of  the  workers,  they  supply  organisa¬ 
tions  for  the  more  complete  investigation  and  discussion 
of  rates  of  wages  and  conditions  of  employment,  secure 
more  uniform  treatment  of  these  questions  within  an 
industry,  and  generally  exercise  a  steadying  influence 
which  leads  to  a  higher  level  of  wages  and  better  conditions 
of  employment  than  could  otherwise  be  obtained. 
Broadly  speaking,  any  united  policy  pursued  by  employers 
which  promotes  the  efficient  organisation  of  an  industry 
must  develop  increased  financial  strength  within  that 
industry,  and  in  this  increased  financial  strength  the 
workers  will  share.  So  far,  therefore,  from  the  interests 
of  employers  and  workers  being  antagonistic  in  this 
matter,  they  are,  in  our  opinion,  very  largely  identical. 

To  ensure  that  giant  combinations,  possessing  virtually 
a  monopoly,  should  not  abuse  their  power,  the  Committee 
recommended  publicity,  the  creation  of  a  Government 
Department  which,  while  supervising  the  operations  of 
trusts  and  of  trust-like  combinations,  would  further  their 
interests  by  placing  at  their  disposal  all  the  information 
obtained  in  the  course  of  its  investigations,  and  would 
prevent  unjustified  suspicion  and  alarm  at  the  formation 
of  these  organisations  on  the  part  of  the  people.  The 
Report  stated: 

We  think  that,  if  serious  efforts  are  to  be  made  by  British 
manufacturers  and  traders  to  organise  themselves  on  the 
lines  recommended  by  the  various  Trade  Committees, 
which  we  have  set  out  above,  it  is  desirable  that  some 
means  should  be  devised  for  securing  to  a  responsible 
Government  Department  adequate  information  as  to  any 
combinations  so  formed,  and  that  provision  should  be 
made  for  State  investigation  in  special  cases.  We  believe 
that  this  would  be  advantageous  to  the  combinations 
themselves,  since  the  knowledge  that  a  power  of  investiga¬ 
tion  did  exist  and  could  be  brought  into  operation  wher¬ 
ever  adequate  cause  was  shown  would  be  likely  to  have  a 
moderating  effect  upon  public  opinion. 


502 


LABOUR  UNREST:  THE  CURE 


We  think  that  the  experience  of  the  War  has  shown 
that  it  is  particularly  desirable  that  information  as  to  all 
international  combinations  affecting  the  production  of 
goods  in  the  United  Kingdom,  or  the  restriction  of  the 
markets  in  which  they  may  be  sold,  should  be  in  the 
possession  of  some  Government  Department.  On  the 
other  hand,  it  is  in  our  judgment  of  great  importance 
that  Government  intervention  in,  or  control  of,  the 
operation  of  combinations  should  be  carefully  restricted 
to  cases  in  which  those  operations  can  be  clearly  shown 
to  be  inimical  to  national  interests. 

As  industrial  combinations  and  consolidations,  such  as 
trusts  and  cartels,  may,  according  to  ancient  English 
law,  be  declared  to  be  “  association  in  restraint  of  trade  ” 
and  therefore  illegal,  the  formation  of  such  organisations 
is  difficult,  for  the  agreements  for  combined  action 
concluded  between  the  various  participants  have  no 
binding  power  and  may  be  broken  by  any  of  them  at  will 
with  impunity,  for  they  cannot  be  enforced  in  a  court  of 
law.  The  Committee,  recognising  that  that  position 
was  highly  prejudicial  to  industrial  efficiency,  frankly 
recommended  that  the  law  regarding  restraint  of  trade 
should  be  amended  so  as  to  enable  the  British  industries, 
to  modernise  their  organisation.  It  stated: 

It  has  been  represented  to  us,  by  the  Federation  of 
British  Industries  amongst  others,  that  any  substantial 
progress  in  the  direction  of  marketing  combinations  is 
dependent  upon  a  revision  of  the  law  in  this  country  as 
regards  associations.  It  is  urged  that  it  is  “  absolutely 
essential  either  that  the  law  in  regard  to  ‘  restraint  of 
trade  ’  should  be  so  amended  that  the  ordinary  objects 
of  associations,  such  as  the  regulation  of  prices  or  output, 
become  legal  objects,  and  associations  are  consequently 
able,  as  in  Germany,  to  enforce  their  rules  in  this  respect 
upon  their  members,  or  else  some  other  legislation  having 
the  same  effect,  such  as  the  conferring  of  a  special  legal 
status  upon  associations,  should  be  passed.” 

We  approve  of  combinations  among  manufacturers. 


LABOUR  UNREST:  THE  CURE 


593 


All  such  combinations  should, where  necessary, be  legalised 
so  as  to  be  enforceable  between  members.  We  think 
that  combinations,  to  be  of  use  to  the  trade  of  the  country, 
should  be  upon  lines  aimed  at  co-ordinating  production, 
promoting  efficiency,  economising  waste,  promoting  home 
trade,  facilitating  export  trade,  and  unifying  selling 
arrangements.  The  ideal  at  which  trade  combinations 
should  aim  is  the  maximum  of  production  at  the  minimum 
of  cost. 

Hitherto  labour,  imbued  by  the  Marxian  doctrine  of 
the  class  war,  though  insisting  upon  the  unlimited  right 
of  the  workers  to  combine  on  the  largest  scale  for  the  very 
purpose  of  restraining  trade,  has  taken  up  an  attitude 
of  uncompromising  hostility  and  of  suspicion  towards  the 
employers  who  wish  to  combine,  and  has  denounced  and 
opposed  all  attempts  at  combination  on  the  part  of  the 
capitalists.  As  long  as  the  workers  continue  to  see  in  the 
capitalists  their  enemies,  they  will  continue  that  policy 
of  hostility  and  suspicion,  to  the  harm  of  the  employers 
and  to  their  own  hurt  as  well.  That  attitude  will  be 
changed  entirely  as  soon  as  the  interests  of  employers 
and  employed  have  become  completely  and  permanently 
harmonised.  As  soon  as  capital  and  labour  have  become 
real  partners,  capital  will  look  upon  the  industrial  problems 
from  the  view-point  of  labour  and  labour  from  the  view¬ 
point  of  capital.  The  two  will  no  longer  be  enemies,  but 
will  feel  that  they  are  one  and  will  act  as  if  they  were  one. 

The  tariff  policy  of  Great  Britain  has  been  shaped  in  the 
past,  not  by  common  sense,  but  by  prejudice.  The 
British  trade  unions  are  organisations  for  the  protection 
of  labour.  They  are  absolutely  opposed  to  that  policy 
of  free  and  unlimited  competition  and  of  cheapness  which 
is  dear  to  the  Free  Trade  doctrinaires.  The  British 
workers,  while  passionately  opposing  the  production 
of  competitive  goods  by  underpaid  British  labour,  have 
in  the  past  favoured  the  free  importation  of  competitive 


594 


LABOUR  UNREST:  THE  CURE 


goods  made  by  underpaid  foreign  workers,  to  their  own 
injury.  They  have  done  so  probably  chiefly  because  the 
protection  of  the  national  industries  by  means  of  a  Customs 
tariff  was  advocated  by  the  employers,  the  capitalists. 

The  prosperity  of  the  British  industries  and  of  the 
workers  engaged  in  them — nay,  the  solvency  of  the 
country — depend  on  a  large  export  trade,  for  the  huge 
quantities  of  necessaries,  such  as  food  and  raw  materials, 
which  must  be  imported  from  abroad  can  be  paid  for 
only  with  manufactured  exports.  It  is  a  common 
experience  that  industries  cannot  develop  a  large  export 
trade  unless  they  dominate  the  domestic  market.  Mr. 
Carnegie  wrote  in  his  Empire  of  Business: 

At  first  European  makers  could  “  dump  their  surplus  ” 
upon  the  market  and  force  American  makers  to  accept 
for  their  entire  output  the  extreme  low  rates  which  had 
only  to  be  taken  by  the  invader  for  a  small  part  of  his. 
The  party  in  control  of  a  profitable  home  market  can  most 
successfully  invade  the  foreign  markets.  In  recent  years 
it  is  the  American  manufacturer  who  is  “  dumping  his 
surplus  ”  in  foreign  territory.  First  conquer  your  home 
market  and  the  foreign  market  will  probably  be  added  to 
you  is  the  rule  with  manufactures  in  international  trade. 

Great  Britain  can  hope  to  follow  a  sane  and  sensible 
tariff  policy  only  when  the  workers  have  learned  that 
they  cannot  benefit  themselves  by  ruining  the  capitalists, 
when  the  interests  of  capital  and  labour  have  become 
identical. 

Many  of  those  who  regard  merely  the  surface  of  things 
have  begun  to  despair  of  Great  Britain  because  of  the 
4 4  wrong-headedness  ”  and  the  44  unreasonableness  ”  of 
labour.  They  complain  that  the  workers  follow  a  policy 
destructive  to  the  industries  by  which  they  live ;  that  their 
demands  are  unreasonable  and  insatiable,  and  that  failure 
to  concede  their  most  fantastic  wishes  leads  to  wanton 
strikes ;  that  the  best-paid  workers  are  the  least  contented 


LABOUR  UNREST:  THE  CURE 


595 


and  are  most  ready  to  bring  industry  to  a  standstill. 
The  general  policy  of  British  labour  has  hitherto  been 
shaped  by  its  hostility  to  capital  and  the  capitalists. 
The  fact  that  the  best-paid  workers  are  the  least  contented 
seems  extraordinary,  but  it  is,  after  all,  not  unnatural. 
Professor  Hadley  wrote : 

“  Just  because  the  labourer  has  so  many  advantages  as 
a  consumer  he  is  often  led  to  feel  more  keenly  his  lack 
of  independence  as  a  producer.  Increased  comfort  is 
attended  with  increased  ambition. 

Lord  Leverhulme  caustically  wrote  in  his  book  The 
Six-Hour  Day: 

If  high  wages,  short  hours,  good  housing,  meant  finality 
to  labour  unrest,  then  labour  would  not  be  a  man,  but  a 
vegetable. 

That  great  and  broad-minded  employer  of  labour 
significantly  added: 

To  harmonise  capital  and  labour  a  ladder  must  be 
provided  from  the  humblest  position  in  industrial  organ¬ 
isation  to  a  seat  on  the  Board  of  Directors.  Capital  must 
provide  a  broader  outlook  for  labour. 

Some  of  labour’s  critics  are  particularly  exasperated 
with  the  workers  because  the  first  condition  put  forward 
by  men  who  have  gone  on  strike,  even  if  they  have  done 
so  under  the  most  wanton  and  the  flimsiest  pretexts, 
is  that  they  will  not  return  to  work  unless  they  are  abso¬ 
lutely  assured  that  there  shall  be  no  “  victimisation,” 
that  their  leaders,  if  ever  so  misguided  or  mischievous, 
shall  be  reinstalled.  There  is,  of  course,  an  explanation 
for  this  attitude  which,  though  highly  inconvenient  to 
employers,  has  its  admirable  side.  Mr.  Carnegie  wrote 
very  sensibly  in  his  Gospel  of  Wealth: 

The  safety  of  its  leaders  is  the  key  of  labour’s  position. 
To  surrender  that  is  to  surrender  everything.  Even  if 


596 


LABOUR  UNREST:  THE  CURE 


the  leader  in  question  had  not  been  as  regularly  at  work 
as  other  men,  even  if  he  had  to  take  days  now  and  then 
to  attend  to  official  duties  for  his  brethren,  the  superior 
of  that  man  should  have  dealt  very  leniently  with  him. 
The  men  cannot  know  whether  their  leader  is  stricken 
down  for  proper  cause  or  not;  but,  at  the  same  time, 
they  cannot  help  suspecting .  And  here  I  call  the  attention 
of  impartial  minds  to  the  elements  of  manhood  and  the 
high  sense  of  honour  and  loyalty  displayed  upon  the 
part  of  working-men  who  sacrifice  so  much  and  throw 
themselves  in  the  front  of  the  conflict  to  secure  the 
safety  of  their  standard-bearers.  Everything  reasonable 
can  be  done  with  men  of  this  spirit. 

The  loyalty  they  show  to  their  leaders  can  be  trans¬ 
ferred  to  their  employers  by  treating  them  as  such  men 
deserve.  Society  has  nothing  to  fear  from  men  so  staunch 
and  loyal  to  one  another.  Nor  is  the  loyalty  shown  in 
this  instance  exceptional;  it  distinguishes  working-men 
as  a  class.  .  .  .  One  hour  of  courtesy  on  the  part  of  the 
employers  would  prevent  many  strikes ;  whether  the  men 
ask  in  proper  manner  for  interviews  or  observe  all  the 
rules  of  etiquette  is  immaterial.  We  expect  from  the 
presumably  better-informed  party  representing  capital 
much  more  in  this  respect  than  from  labour;  and  it  is 
not  asking  too  much  of  men  entrusted  with  the  manage¬ 
ment  of  great  properties  that  they  should  devote  some 
part  of  their  attention  to  searching  out  the  causes  of 
disaffection  among  their  employees,  and,  where  they 
exist,  that  they  should  meet  the  men  more  than  halfway 
in  the  endeavour  to  allay  them.  There  is  nothing  but 
good  for  both  parties  to  be  derived  from  labour  teaching 
the  representative  of  capital  the  dignity  of  man,  as  man. 
The  working-man,  becoming  more  and  more  intelligent, 
will  hereafter  demand  the  treatment  due  to  an  equal. 

Some  believe  that  the  workers  are  discontented  because 
they  are  too  well  off,  and  they  recall  with  regret  the  olden 
days  when  wages  were  low,  when  the  wage-earners  could 
not  read  and  did  not  possess  the  vote,  and  when  harmony 
reigned  between  masters  and  men.  High  wages,  though 
they  need  not  satisfy  the  men,  have  their  great  advan- 


LABOUR  UNREST:  THE  CURE  597 

tages  from  the  national  point  of  view.  Professor  Hadley 
wrote : 

Under  the  existing  social  order  men  who  are  capable 
of  higher  things  multiply  recklessly  through  sheer  hope¬ 
lessness.  With  men  like  this,  a  better  distribution  of  the 
results  of  labour  would  doubtless  operate  not  only  to 
increase  their  productive  efficiency,  but  to  contribute  to 
their  prudence  in  marrying,  and  thus  to  diminish  the 
birth-rate.  .  .  . 

If  a  large  part  of  the  community  had  been  educated  to 
demand  something  besides  cheap  food  and  to  exercise 
self-restraint  in  the  multiplication  of  numbers  until  it  is 
possible  to  provide  a  high  standard  of  comfort,  we  shall 
have  a  relatively  smaller  demand  for  food  and  a  relatively 
larger  demand  for  those  comforts  and  luxuries  which  are 
the  product  of  higher  intelligence  and  require  a  higher 
rate  of  pay  in  order  to  enable  the  producer  to  furnish 
them  to  advantage. 

Friction  between  capital  and  labour  has  very  greatly 
increased  of  recent  years  for  various  reasons,  and  parti¬ 
cularly  owing  to  the  concentration  of  industry.  A  small 
workshop  or  factory  is  like  a  family.  Misunderstandings 
between  the  master  and  a  few  workers  are  rare.  Dis¬ 
satisfaction  is  soon  noticed,  and  differences  are  rapidly 
and  easily  settled.  The  larger  the  industrial  enterprises 
grow  and  the  more  men  they  employ,  the  greater  becomes 
the  chasm  which  separates  the  employer  from  the  employee. 
Working-men  often  complain  of  the  soullessness  of  modern 
industry,  of  the  inhumanity  of  the  great  industrial 
machine.  It  is  difficult  to  prevent  misunderstandings 
and  dissatisfaction  leading  to  strikes  or  lock-outs  in  the 
case  of  huge  modern  concerns  which  employ  thousands, 
and  sometimes  hundreds  of  thousands  of  workers,  but 
much  can  be  done  by  judicious  action.  Mr.  Carnegie 
recommended  in  The  Gospel  of  Wealth: 

We  assemble  thousands  of  operatives  in  the  factory 
and  in  the  mine,  of  whom  the  employer  can  know  little 

39 


598 


LABOUR  UNREST:  THE  CURE 


or  nothing,  and  to  whom  he  is  little  better  than  a  myth. 
All  intercourse  between  them  is  at  an  end.  Rigid  castes 
are  formed,  and,  as  usual,  mutual  ignorance  breeds 
mutual  distrust.  .  .  . 

It  is  not  the  intelligent  workman,  who  knows  that 
Labour  without  his  brother  Capital  is  helpless,  but  the 
blatant,  ignorant  man,  who  regards  capital  as  the  natural 
enemy  of  labour,  who  does  so  much  to  embitter  the 
relations  between  employer  and  employed.  ...  As  men 
become  intelligent,  more  deference  must  be  paid  to  them 
personally  and  to  their  rights,  and  even  to  their  opinions 
and  prejudices;  and,  upon  the  whole,  a  greater  share  of 
profits  must  be  paid  in  the  day  of  prosperity  to  the 
intelligent  than  to  the  ignorant  workman.  He  cannot 
be  imposed  upon  so  readily.  On  the  other  hand,  he  will 
be  found  much  readier  to  accept  reduced  compensation 
when  business  is  depressed;  and  it  is  better  in  the  long 
run  for  capital  to  be  served  by  the  highest  intelligence 
and  to  be  made  aware  of  the  fact  that  it  is  dealing  with 
men  who  know  what  is  due  to  them,  both  as  to  treatment 
and  compensation.  I  have  noticed  that  the  manager 
who  confers  oftenest  with  a  committee  of  his  leading  men 
has  the  least  trouble  with  his  workmen. 

What  we  must  seek  is  a  plan  by  which  the  men  will 
receive  high  wages  when  their  employers  are  receiving 
high  prices  for  the  product,  and  hence  are  making  large 
profits;  and,  per  contra ,  when  the  employers  are  receiving 
low  prices  for  the  product,  and  therefore  small  if  any 
profits,  the  men  will  receive  low  wages.  If  this  plan 
can  be  found,  employers  and  employed  will  be  44  in  the 
same  boat,”  rejoicing  together  in  their  prosperity,  and 
calling  into  play  their  fortitude  together  in  adversity. 
There  will  be  no  room  for  quarrels,  and  instead  of  a 
feeling  of  antagonism  there  will  be  a  feeling  of  partnership 
between  employers  and  employed.  .  .  . 

I  believe  that  the  next  steps  in  the  advance  toward 
permanent  peaceful  relations  between  capital  and  labour 
are — 

First,  that  compensation  be  paid  the  men  based  upon 
a  sliding  scale  in  proportion  to  the  prices  received  for 
product. 

Second,  a  proper  organisation  of  the  men  of  every  works 


LABOUR  UNREST:  THE  CURE 


599 


to  be  made,  by  which  the  natural  leaders,  the  best  men 
will  eventually  come  to  the  front  and  confer  freely  with 
the  employers. 

Third ,  peaceful  arbitration  to  be  in  all  cases  resorted 
to  for  the  settlement  of  differences  which  the  owners  and 
the  Mill  Committee  cannot  themselves  adjust  in  friendly 
conference. 

Fourth,  no  interruption  ever  to  occur  to  the  operations 
of  the  establishment,  since  the  decision  of  the  arbitrators 
shall  be  made  to  take  effect  from  the  date  of  reference. 

If  these  measures  were  adopted  by  an  establishment, 
several  important  advantages  would  be  gained. 

First,  the  employer  and  employed  would  simultaneously 
share  their  prosperity  or  adversity  with  each  other.  The 
scale  once  settled,  the  feeling  of  antagonism  would  be  gone, 
and  a  feeling  of  mutuality  would  ensue.  Capital  and 
labour  would  be  shoulder  to  shoulder,  supporting  each 
other. 

Second,  there  could  be  neither’  strike  nor  lock-out,  since 
both  parties  had  agreed  to  abide  by  a  forthcoming 
decision  of  disputed  points.  Knowing  that  in  the  last 
resort  strangers  were  to  be  called  in  to  decide  what  should 
be  a  family  affair,  the  cases  would  indeed  be  few  which 
would  not  be  amicably  adjusted  by  the  original  parties 
without  calling  in  others  to  judge  between  them. 

Mr.  Carnegie  achieved  a  considerable  measure  of  success 
with  the  policy  of  conference,  conciliation,  and  fairness 
outlined  by  him,  but  he  failed  to  establish  permanently 
peaceful  relations  between  capital  and  labour,  as  he  had 
hoped,  for  he  experienced  very  serious  strikes.  His 
failure  was  only  natural.  As  long  as  the  aims  and 
interests  of  capital  and  labour  are  not  identical,  capital 
may  try  to  take  unfair  advantage  of  labour  and  labour 
of  capital.  Consequently  one  side  is  apt  to  suspect  the 
other  side,  and  mutual  distrust  leads  to  differences  which 
cannot  be  adjusted  by  discussion,  arbitration,  etc.  Thus, 
settlement  becomes  a  question,  not  of  right,  but  of 
power,  and  the  result  is  the  usual  violent  conflict  between 


600 


LABOUR  UNREST:  THE  CURE 


capital  and  labour,  which  leaves  behind  it  a  harvest  of 
resentment  on  one  side  or  on  both. 

The  policy  of  conference  leading  to  voluntary  or  com¬ 
pulsory  arbitration  has  failed  hitherto,  and  will  probably 
continue  to  fail,  to  conciliate  permanently  capital  and 
labour,  because  it  cannot  bridge  over  the  chasm  which 
separates  the  two.  The  reason  of  that  failure  lies  not 
in  the  stubbornness  or  the  short-sightedness  of  the 
emplojrers  or  of  the  workers:  it  springs  from  a  deeper 
cause.  The  differences  between  capital  and  labour  have 
hitherto  proved  unadjustable,  except  temporarily,  and 
are  growing  from  year  to  year  in  extent  and  in  intensity, 
because  industry,  especially  if  carried  on  on  a  large  or  on  a 
very  large  scale,  is  autocratic,  not  democratic,  in  character  : 
because  men  who  have  been  brought  up  to  love  and 
admire  freedom  and  independence  resent  being  absolutely 
dependent  upon  their  employers  and  their  weekly  wage, 
however  large  that  wage  may  be — resent  having  to  submit 
unconditionally  to  the  quasi-military  discipline  of  the 
factory,  resent  being  mere  wheels  in  a  gigantic  machine. 
The  industrial  system,  which  was  evolved  in  feudal  times, 
has  preserved  its  feudal  character,  and  herein  lies  the  rea¬ 
son  that  it  is  breaking  down.  The  task  of  democratising 
it  imposes  itself  imperiously.  Some  of  the  political  and 
industrial  leaders  have  begun  to  recognise  that  the  root 
cause  of  labour  unrest  lies  in  the  fact  that  political 
democracy  and  industrial  autocracy  are  irreconcilable. 
President  Roosevelt  wrote  in  The  Foes  of  Our  Oivn  House¬ 
hold: 

Our  system,  or  rather  no-system,  of  attempting  to 
combine  political  democracy  with  industrial  autocracy, 
and  tempering  the  evil  of  the  boss  and  the  machine  poli¬ 
tician  by  the  evil  of  the  doctrinaire  and  the  demagogue, 
has  now  begun  to  creak  and  strain  so  as  to  threaten  a 
breakdown. 


LABOUR  UNREST:  THE  CURE  601 

Lord  Leverhulme  wrote  in  his  book,  The  Six-Hour  Day : 

Modern  industrial  conditions,  with  thousands  and  tens 
of  thousands  of  workmen,  and  in  at  least  one  industry 
a  quarter  of  a  million  workmen,  under  one  oligarchical  rule 
are  intensely  anti-democratic,  and  as  such  violate  the 
gregarious  instincts  of  humanity.  And  just  as  it  is  true 
that  the  position  of  British  industries  to-day  is  the  result 
of  yesterday,  so  their  position  to-morrow  will  depend 
on  our  actions  of  to-day.  Capitalists  have  now  the  task 
set  them  to  democratise  their  system,  and  to  create 
conditions  that  will  enable  labour  to  take  some  democratic 
share  in  management,  and  some  responsibility  for  the 
success  of  the  undertaking.  Productive  and  distributive 
business  must  in  the  future  be  carried  on  under  less 
oligarchic  and  under  more  democratic  conditions.  Labour 
will  not  be  brought  to  work  side  by  side  with,  and  to 
harmonise  with,  Capital  merely  by  ever  higher  and  higher 
wages,  shorter  and  shorter  hours,  combined  with  better 
and  better  welfare  conditions. 

The  wages  system  has  broken  down  as  a  sole  and  only 
solution.  As  huge  businesses  have  sprung  into  existence, 
the  difficulties  of  the  wages  system  as  such  have  increased. 
It  is  impossible  under  the  wages  system  alone  to  make 
Labour  realise  that  the  true  interests  of  Labour  and 
Capital  are  identical. 

Democratic  labour  works  for  the  capitalists,  but  it  does 
so  under  protest.  It  protests,  not  against  the  individual 
employer,  but  against  the  system.  It  demands,  more  or 
less  consciously,  a  share  in  the  business,  and  threatens 
to  destroy  the  capitalist  system  unless  its  demands  are 
granted.  Herein  lies  the  reason  that  labour  works 
grudgingly  and  produces  as  little  as  possible  in  return 
for  the  highest  wage  obtainable.  That  resentment  has 
existed  for  a  long  time.  The  great  co-operative  movement 
of  England  was  started  as  a  protest  against  the  wage 
system,  and  its  object  originally  was  to  make  the  worker 
independent  of  the  capitalist. 

Socialist  agitators  have  told  the  workers  that  they  are 


602 


LABOUR  UNREST:  THE  CURE 


“wage  slaves,”  that  the  capitalist  system  is  a  system  of 
“  wage  slavery.”  These  bitter  words  have  proved  most 
potent  weapons  in  the  armoury  of  the  agitator.  They 
have  caught  on  with  the  masses,  and  large  numbers  of 
workers  have  come  to  consider  themselves  as  slaves  of 
industry.  There  must  evidently  be  some  justification  for 
the  sentiment  of  revolt  against  dependence  on  a  weekly 
wage,  otherwise  the  term  “  wage  slavery  ”  and  “  wage 
slave  ”  would  not  have  become  so  popular.  At  any  rate, 
the  feeling  that  working  for  a  weekly  wage  is  a  form  of 
slavery  exists  and  must  be  reckoned  with  by  those  who 
endeavour  to  study  labour  conditions  and  social  conditions 
as  they  are. 

If  the  dissatisfied  wage-earners  consider  themselves 
slaves  of  the  industrial  system,  the  psychological  and 
economic  consequences  springing  from  true  slavery  should 
apply  to  some  extent  to  the  modern  labour  problem. 
Professor  Hadley  compared  the  psychological  and  in¬ 
dustrial  consequences  flowing  from  slavery  and  emancipa¬ 
tion  as  follows: 

The  slave  tended  to  keep  his  product  as  a  minimum. 

.  .  .  Any  extra  exertion  or  care  redounded  to  the  profit 
of  the  master,  not  of  the  slave.  The  inevitable  result 
was  low  efficiency  and  great  waste.  The  more  complicated 
the  work  to  be  done,  the  less  was  the  chance  of  avoiding 
these  evils.  A  slave-driver  could  compel  those  who  were 
subjected  to  his  rule  to  perform  a  certain  amount  of 
physical  labour,  but  he  could  not  compel  them  to  exercise 
intelligence  or  zeal.  .  .  . 

The  more  intelligent  and  ambitious  the  labourer,  the 
greater  will  be  the  difference  between  his  minimum 
product  which  he  creates  as  a  serf  and  his  maximum 
product  which  he  can  create  as  a  freeman;  the  greater, 
therefore,  will  be  the  possible  advantages  to  all  parties 
from  emancipation. 

These  significant  phrases  deserve  to  be  pondered  upon. 
By  emancipating  the  wage-earners,  by  making  them  full 


LABOUR  UNREST:  THE  CURE 


603 


partners  in  industry  and  commerce,  it  should  be  possible 
to  double  and  treble  their  output  and  the  prosperity  of 
the  whole  nation. 

Some  far-seeing  Americans  and  Englishmen  have  begun 
to  recognise  that  the  wage  system  is  opposed  to  the 
modern  spirit,  and  that  it  requires  either  abolition  by 
placing  all  the  living  energies  of  a  nation  under  an  all- 
powerful  bureaucracy — a  solution  which  is  favoured  by 
Socialists  and  dreamers — or  amendment  on  individualist 
lines.  The  latter  course  is  recommended  by  far-seeing 
and  practical  business  men  and  statesmen  who  recognise 
that  if  the  Socialists  were  allowed  to  put  their  theories 
into  practice  they  would  create  confusion  and  might 
destroy  modern  civilisation.  Mr.  Carnegie  wrote  on  the 
first  page  of  his  Gospel  of  Wealth : 

The  problem  of  our  age  is  the  proper  administration 
of  wealth,  that  the  ties  of  brotherhood  may  still  bind 
together  the  rich  and  poor  in  harmonious  relationship. 

Mr.  Roosevelt,  with  the  vision  of  a  seer,  stated  in  his 
last  book,  The  Foes  of  Our  Own  Household: 

There  can  and  will  come — gradually  and  by  evolution, 
not  revolution — a  shift  in  control  which  will  mean  that 
the  competent  workers  become  partners  in  the  enterprise. 
This  partnership  must  mean  not  only  a  sharing  of  profit, 
but  a  sharing  in  the  guidance  and  management ;  and  there¬ 
fore  it  can  only  come  step  by  step,  as  the  wage-workers 
grow  out  of  the  narrow  envy  and  jealousy  which  make  so 
many  men  resent  superior  ability  and  strive  to  deny  it 
proper  reward. 

It  is  not  necessary  that  the  Van  Hornes  and  the  Jim 
Hills  of  the  future  shall  receive  the  enormous  financial 
reward  they  have  had  in  the  past;  but  it  must  be  sub¬ 
stantial,  or  they  will  not  lead  to  success  the  business  in 
which  the  brakemen,  switchmen,  engineers,  firemen,  will, 
we  hope,  ultimately  become  part  owners  as  well  as  workers. 
Such  leadership  is  absolutely  needed  by  the  men  below, 


604 


LABOUR  UNREST:  THE  CURE 


and  it  must  be  handsomely  paid  for;  there  is  no  more 
mischievous  form  of  privilege  than  giving  equal  rewards 
for  unequal  service,  and  denying  the  great  reward  to  the 
great  service.  But  it  need  not  be  a  reward  fantastically 
out  of  proportion  to  the  reward  of  the  men  beneath.  .  .  . 

When  the  workers  themselves  recognise  the  need  of 
able,  highly  skilled,  and  well-paid  managers  and  leaders, 
they  will  be  able  themselves  to  own  and  control  great 
industries.  But  until  this  is  done  a  great  industry  can 
no  more  be  managed  by  a  mass-meeting  of  manual  labourers 
than  a  battle  can  be  won  in  such  fashion,  than  a  painters’ 
union  can  paint  a  Rembrandt,  or  a  typographical  union 
write  one  of  Shakespeare’s  plays.  .  .  . 

It  is  simply  common  sense  to  recognise  that  there  is  the 
widest  inequality  of  service,  and  that  therefore  there 
must  be  a  reasonably  wide  inequality  of  reward,  if  our 
society  is  to  rest  upon  the  basis  of  justice  and  wisdom. 
Service  is  the  true  test  by  which  a  man’s  worth  should  be 
judged.  We  are  against  privilege  in  any  form;  privilege 
to  the  capitalist  who  exploits  the  poor  man,  and  privilege 
to  the  shiftless  or  vicious  poor  man  who  would  rob  his 
thrifty  brother  of  what  he  has  earned.  Certain  exceedingly 
valuable  forms  of  service  are  rendered  wholly  without 
capital.  On  the  other  hand,  there  are  exceedingly  valuable 
forms  of  service  which  can  be  rendered  only  by  means  of 
great  accumulations  of  capital,  and  not  to  recognise 
this  fact  would  be  to  deprive  the  whole  people  of  one  of 
the  great  agencies  for  their  betterment. 

The  test  of  a  man’s  worth  to  the  community  is  the 
service  he  renders  it,  and  we  cannot  afford  to  make  this 
test  by  material  considerations  alone.  One  of  the  main 
vices  of  the  Socialism  which  was  propounded  by  Proudhon, 
Lassalle,  and  Marx,  and  which  is  preached  by  their 
disciples  and  imitators,  is  that  it  is  blind  to  everything 
except  the  merely  material  side  of  life.  It  is  not  only 
indifferent,  but  at  bottom  hostile,  to  the  intellectual,  the 
religious,  the  domestic  and  moral  life;  it  is  a  form  of 
communism  with  no  moral  foundation,  but  essentially 
based  on  the  immediate  annihilation  of  personal  ownership 
of  capital,  and,  in  the  near  future,  the  annihilation  of  the 
family,  and  ultimately  the  annihilation  of  civilisation. 


LABOUR  UNREST :  THE  CURE 


605 


In  his  address  to  Congress,  delivered  on  May  20,  1919, 
President  Wilson  said: 

We  cannot  go  any  farther  in  our  present  direction. 
We  have  already  gone  too  far.  We  cannot  live  our  right 
life  as  a  nation  or  achieve  our  proper  success  as  an  indus¬ 
trial  community  if  capital  and  labour  are  to  continue 
to  be  antagonists  instead  of  being  partners,  if  they  are  to 
continue  to  distrust  one  another  and  contrive  how  they 
can  get  the  better  of  one  another,  or — what  perhaps 
amounts  to  the  same  thing — calculate  by  what  form  and 
degree  of  coercion  they  can  manage  to  extort  on  the  one 
hand  work  enough  to  make  enterprise  profitable;  on  the 
other,  justice  and  fair  treatment  enough  to  make  life 
tolerable.  That  bad  road  has  turned  out  a  blind  alley. 
It  is  no  thoroughfare  to  real  prosperity.  We  must  find 
another,  leading  in  another  direction  and  to  a  very  dif¬ 
ferent  destination.  It  must  lead  not  merely  to  accom¬ 
modation,  but  also  to  a  genuine  co-operation  and  partner¬ 
ship  based  upon  a  real  community  of  interest  and  par¬ 
ticipation  in  control.  There  is  now,  in  fact,  a  real  com¬ 
munity  of  interest  between  capital  and  labour,  but  it 
has  never  been  made  evident  in  action.  It  can  be  made 
operative  and  manifest  only  in  a  new  organisation  of 
industry.  The  genius  of  our  business  men  and  the  sound 
practical  sense  of  our  workers  can  certainly  work  such  a 
partnership  out  when  once  they  realise  exactly  what  it 
is  that  they  seek  and  sincerely  adopt  a  common  purpose 
with  regard  to  it. 

Being  convinced  that  the  wage  system  was  the  principal 
cause  of  industrial  unrest,  many  Englishmen  and  Americans 
have  experimented  in  profit-sharing  and  co-partnership, 
but,  except  in  a  few  and  relatively  unimportant  cases, 
the  various  attempts  at  giving  labour  a  share  in  the 
business  have  failed.  They  have  failed,  not  because  the 
idea  of  labour  sharing  profits  with  capital  is  wrong,  but 
because  the  right  formula  had  not  been  discovered.  A 
plain  and  simple  formula  may  achieve  great  things  in  the 
labour  world.  That  is  proved  by  the  history  of  the  co- 


606 


LABOUR  UNREST:  THE  CURE 


operative  movement.  Co-operation  among  the  workers 
is  a  very  old  idea.  It  had  been  tried  innumerable  times 
both  in  England  and  abroad,  but  all  the  experiments  had 
_  proved  disastrous.  A  few  English  working-men  at  last 
thought  out,  or  stumbled  upon,  the  right  principle. 
Twenty -eight  poor  Rochdale  workmen,  flannel- weavers, 
etc.,  came  together  and  resolved  to  form  a  co-operative 
society  in  order  to  be  able  to  buy  tea  and  sugar  more 
advantageously.  They  collected  a  fund  of  £28,  by  two¬ 
penny  and  threepenny  subscriptions,  and  opened  a  tiny 
shop  in  Toad  Lane  in  December,  1 844.  Having  discovered 
the  right  principle  and  formula,  they  prospered,  and  the 
little  enterprise  grew  to  truly  gigantic  proportions.  The 
Report  of  the  Control  Board  of  Co-operative  Societies 
placed  before  the  Co-operative  Congress  held  in  Liverpool, 
1918,  stated: 

At  the  end  of  1916  there  were  at  work  in  the  United 
Kingdom  1,488  industrial  co-operative  distributive  and 
productive  societies  with  an  aggregate  membership  of 
3,563,769;  a  total  share,  loan,  and  reserve  capital  of 
£77,937,736;  a  total  trade  (distributive  and  productive) 
of  £237,525,135,  and  a  total  profit — before  deduction  of 
interest  on  share  capital — of  £18,958,388.  The  total 
number  of  persons  directly  employed  by  the  societies  was 
154,622,  and  the  total  wages  paid  during  the  year 
amounted  to  £10,391,245,  compared  with  149,852  em¬ 
ployees  and  £9,607,434  in  wages  in  1915. 

By  discovering,  or  stumbling  upon,  a  simple  and  prac¬ 
tical  formula,  the  twenty-eight  poor  workmen  of  Rochdale 
have  created  one  of  the  largest  and  one  of  the  most 
powerful  businesses  in  the  world,  which  employs  a  vast 
army  of  workers. 

Profit-sharing,  to  be  successful,  should  have  three 
features.  In  the  first  place,  it  should  offer  so  substantial 
a  benefit  to  the  workers  as  to  make  it  of  very  considerable 
value.  In  the  second  place,  it  should  apply  to  all  the 


LABOUR  UNREST:  THE  CURE 


607 


workers  of  an  undertaking  without  exception,  for  otherwise 
those  who  do  not  share  in  the  profits  will  quarrel  with 
those  who  do.  Besides,  as  the  non-profit-sharers  might 
begin  a  strike  and  pull  out  the  unwilling  profit-sharers, 
strikes  would  still  be  possible.  In  the  third  place,  the 
scheme  should  be  of  the  utmost  simplicity,  so  as  to  make 
its  attractiveness  and  fairness  clear  to  all. 

In  order  to  cause  all  the  workers,  let  us  say  of  a  factory, 
to  participate  in  the  sharing  of  profits,  no  contributions 
and  no  investments  of  money  on  the  part  of  the  workers 
should  be  required.  The  share  capital  of  the  concern 
should  be  increased  by  a  very  substantial  sum,  let  us  say 
by  30,  40,  or  50  per  cent.  The  new  capital  so  created 
would  belong  to  the  workers  collectively  and  be  vested 
in  them  bj^  deed.  There  might  be  trustees  to  look  after 
the  workers’  interests.  The  dividends  accruing  to  these 
workers’  shares  would  be  lumped  together  and  would  be 
distributed  among  the  foremen  workers,  etc.,  in  accordance 
with  their  half-yearly  earnings,  careful  allowance  being 
made  for  illness,  etc.  The  half-yearly  distribution  of  such 
dividends  would,  of  course,  keenly  interest  the  workers. 
They  would  see  in  them  at  first  merely  a  windfall,  a 

bonus  ”  of  so  many  pounds. 

In  order  to  increase  their  interest  in  the  business,  one 
or  several  generally  respected  workers  should  be  selected 
by  the  directors  and  shareholders  and  be  invited  to  join 
the  Board  of  Directors.  These  workmen-directors  should 
have  a  twofold  function:  they  should  assist  the  other 
directors  in  the  usual  way,  and  in  addition  they  should 
keep  the  workers  constantly  informed  as  to  the  course 
of  the  business.  They  would  thus  act  as  an  invalu¬ 
able  connecting-link  between  the  management  and  the 
employees.  They  should  issue  frequently,  and  at  regu¬ 
lar  intervals,  to  the  workmen-shareholders  reports,  or 
bulletins,  as  to  the  progress  of  the  factory,  sales,  prices, 


608 


LABOUR  UNREST:  THE  CURE 


etc.,  and  address  them  occasionally  at  special  works 
meetings,  where  subjects  of  interest  to  the  management 
and  the  men,  such  as  the  introduction  of  new  machinery, 
or  improved  organisation,  or  of  an  alteration  in  the  rates 
paid,  might  be  discussed. 

Hitherto  the  great  body  of  workers  has  consisted  of 
wage-drawers  who  have  been  far  more  interested  in  sporting 
events  than  in  the  business  in  which  they  spend  their 
lives.  Their  half-yearly  “  bonus,”  or  dividend,  which 
would  be  liable  to  great  fluctuations,  and  the  amount  of 
which  would  depend  on  the  fortunes  of  the  factory,  would 
arouse  in  them  a  keen  interest  in  the  profits  of  the  establish¬ 
ment.  They  would  cease  to  believe  that  it  is  immoral 
to  carry  on  a  business  for  private  profit,  as  the  Socialists 
have  told  them,  and  they  would  no  longer  resist  piece 
wages  and  the  introduction  of  improvements  which  tend 
to  increase  output,  sales,  and  profits.  They  would  suggest 
to  the  management,  through  the  workmen-directors, 
economies  and  improvements,  especially  as  keenness  and 
ability  might  lead  eventually  to  a  seat  at  the  Board  table. 
Innumerable  improvements  in  machinery  have  been 
suggested  by  those  who  constantly  use  it.  Workmen 
have  made  countless  valuable  inventions.  Profit-sharing 
on  a  substantial  scale,  combined  with  full  rewards  for 
valuable  improvements  suggested,  would  stimulate  the 
spirit  of  invention  and  emulation  among  the  workers 
to  the  utmost. 

Having  a  substantial  share  in  the  profits  of  the  under¬ 
taking,  all  inducements  to  antagonise  capital  by  striking, 
by  keeping  production  low,  by  opposing  the  introduction 
of  machinery,  by  insisting  upon  unduly  short  working 
hours,  etc.,  would  be  gone.  Strikes  would  become 
practically  impossible.  The  loss  caused  to  the  factory 
by  a  strike  would,  of  course,  reduce  profits,  and  would 
therefore  considerably  affect  the  substantial  dividend- 


LABOUR  UNREST:  THE  CURE 


609 


bonus  of  the  workers.  If  they  struck  work,  they  would  no 
longer  act  against  the  capitalists,  hut  would  strike  largely 
against  themselves,  which  would  be  absurd. 

The  men  would  soon  discover  that  increased  production 
meant  increased  profits  and  increased  bonuses  at  the  half- 
yearly  distribution.  The  working-men  themselves  would 
therefore  begin  to  enquire  why  So-and-so  in  Yorkshire 
or  in  Massachusetts  makes  a  large  profit  and  their  own 
factory  a  small  one.  They  would  compare  the  dividends 
paid  among  the  various  works,  and  would  urge  the 
management  of  their  own  factory,  through  the  workmen - 
directors,  to  remodel  the  plant,  to  reorganise  the  sales 
department,  to  introduce  piece  work,  or  to  amalgamate 
with  other  concerns. 

It  may  be  objected  that  the  increase  of  the  share  capital 
by  30,  40,  or  50  per  cent. — I  should  prefer  the  larger 
figure — would  lead  to  a  very  serious  shrinkage  in  the 
dividends  paid  to  the  original  shareholders  and  to  a  con¬ 
siderable  reduction  in  the  value  of  the  original  shares 
which  would  entail  unmerited  suffering.  At  first  sight 
that  objection  would  seem  justified.  However,  if,  as  is  to 
be  anticipated,  output  and  profits  should  under  the  system 
proposed  be  doubled  and  trebled,  the  profits  and  dividends 
of  the  factory  should  increase  at  a  similar  ratio.  I  have 
shown  in  previous  chapters ,  by  means  of  authentic  statistics , 
that  the  American  workers  produce  on  an  average  from 
two  to  three  times  as  much  per  head,  both  gross  and  net, 
as  do  their  British  colleagues  engaged  in  the  identical 
callings.  It  can  therefore  not  be  doubted  that,  with 
improved  organisation  and  an  improved  mechanical 
outfit,  British  production  per  worker  can  be  brought  up 
to  at  least  the  American  output.  But  the  doubling  and 
trebling  of  production  is  possible  only  if  the  workers 
cease  antagonising  capital  and  co-operate  with  the 
management  with  cordial  goodwill. 


610 


LABOUR  UNREST:  THE  CURE 


A  financier  often  purchases  a  number  of  competitive 
undertakings  at  an  exaggerated  price,  adds  to  the  inflated 
sum  paid  for  them  a  large  promoter’s  profit,  and  creates 
_  a  huge  company  or  trust,  which  has  often  double  the 
nominal  capital  possessed  by  the  undertakings  of  which 
it  is  composed.  Very  frequently  it  is  found  that  the  new 
undertaking  earns  without  difficulty  large  dividends  of 
the  greatly  inflated  capital,  because  amalgamation  has 
led  to  both  increased  efficiency  and  vast  economies. 
The  operation  described  is  a  commonplace  of  finance. 
In  carrying  through  such  an  operation,  the  organising 
financier  does  not  swindle  the  public,  as  people  often 
assert.  He  merely  increases  very  greatly  the  efficiency 
and  productive  power  of  industry,  and  capitalises  the 
prospective  profits  arising  from  the  amalgamation  of  the 
various  competitive  undertakings.  By  increasing  the 
capital  of  the  factory  by  30,  40,  or  50  per  cent-.,  and  vesting 
the  new  shares  in  the  workers  collectively,  the  directors 
would  merely  capitalise  the  prospective  profits  arising 
from  gaining  the  permanent  goodwill  of  the  workers  and 
permanent  industrial  peace. 

Hitherto  the  workers  have  been  reluctant  to  invest  their 
savings  in  the  factory  in  which  they  are  engaged,  and  they 
have  quickly  sold  bonus  shares  which  were  given  them. 
As  collective  shareholders  they  would  become  interested 
in  the  working  of  the  concern,  and  through  the  periodical 
statements  relating  to  the  business,  the  reports  of  their 
own  directors,  and  the  discussions  at  works  meetings, 
they  would  become  intimately  acquainted  with  the 
commercial  and  financial  aspects  of  the  undertaking. 
They  would  therefore  begin  to  feel  greater  confidence  in 
its  stability,  and  be  willing  to  be  not  only  collective 
shareholders,  but  individual  shareholders  by  purchase 
as  well.  They  would  probably  begin  by  investing  their 
bonus  dividends  in  shares,  but  no  pressure  should  be 


LABOUR  UNREST:  THE  CURE 


611 


put  on  them  to  do  so.  Opportunities  should  be  furnished 
for  their  putting  money  into  shares. 

The  British  industries  suffer  from  lack  of  modern  outfit, 
from  an  insufficiency  of  capital  invested  in  them.  In 
1907-1909  the  capital  invested  in  industry  per  worker 
was  £483  in  the  United  States,  and  only  £212  in  the  United 
Kingdom.  The  necessary  additions  to  the  plant  might  be 
made  largely  by  the  workers  themselves  out  of  savings. 
It  would  be  all  to  the  good  if  their  share  in  the  under¬ 
taking  would  be  increased  far  beyond  the  collective  share 
allotted  to  them,  if  half  the  capital  and  more  would  be 
owned  by  the  workers  themselves .  N o  one  restricts  output 
or  hours  who  is  working  for  himself.  The  motto  of  the 
workers  should  become  “  Shareholders  all,  managers  all, 
capitalists  all.”  The  most  successful  undertakings  would 
probably  be  those  in  which  the  workers  themselves  held 
the  larger  portion  of  the  shares,  and  those  in  which  the 
dividends  paid  to  the  workers  were  particularly  great. 
It  is  conceivable  that  in  some  cases  speeding  up  would 
cause  the  workers’  dividends  to  exceed  their  wages. 

It  is  frequently  asserted  that  the  workers  are  so  poor 
that  they  cannot  own  industrial  undertakings,  such  as 
factories.  That  belief  is  quite  erroneous.  In  1907,  the 
year  in  which  the  British  Census  of  Production  was  taken, 
the  capital  invested  in  the  British  industries  came  to  £212 
per  worker.  In  some  industries  the  amount  was  higher 
and  in  some  it  was  lower.  That  sum  should  be  within 
reach  of  many  wage-earners.  The  future  might  see 
factories  arise  owned  exclusively  by  the  men  employed, 
and  they  ought  to  be  among  the  most  successful. 

The  plan  of  profit-sharing  outlined  has  the  great 
advantage  of  being  easily  applicable  to  the  large  and  the 
very  large  undertakings  in  which  labour  troubles  are 
particularly  frequent.  It  can  as  readily  be  applied  to 
railways,  shipping  companies,  docks,  warehouses,  coal- 


612 


LABOUR  UNREST:  THE  CURE 


mines,  etc.,  as  to  factories,  if  there  is  a  large  margin  of 
prospective  profit  owing  to  the  possibility  of  increasing 
efficiency  in  production.  The  plan  is,  of  course,  particu- 
_  larly  advisable  in  those  numerous  cases  in  which  output 
is  unduly  low  owing  to  the  unwillingness  of  the  workers 
to  increase  it.  In  those  industries  in  which  production 
per  worker  is  extremely  high,  the  introduction  of  profit- 
sharing  might  not  be  advantageous  to  the  original  share¬ 
holders.  Hence  the  project  seems  more  suitable  for  a 
country  of  low  and  deliberately  restricted  individual 
production,  such  as  Great  Britain,  than  for  a  land  where 
high  individual  production  is  general,  such  as  the  United 
States. 

At  present  many  factories  suffer  because  the  unions 
insist  upon  uniformity  of  wages  regardless  of  the  financial 
position  and  profits  of  the  various  undertakings.  If  the 
profit-sharing  system  described  should  be  introduced, 
and  if  it  should  catch  on  and  become  general,  the  trade 
union  wages  rate  would  still  be  uniform,  but  there  would 
be  a  great  variety  of  earnings  owing  to  the  bonus-dividends 
added,  the  amount  of  which  would  depend  partly  on  the 
ability  of  the  management,  but  chiefly  on  the  intelligent 
co-operation  of  the  workers  themselves. 

The  introduction  of  general  profit-sharing  in  the  indus¬ 
tries  would  profoundly  alter  the  character  of  the  trade 
unions.  They  were  created  to  fight  capital.  They  were 
engines  of  Avar.  Henceforth  their  attitude  would  change, 
for  their  war  would  be  won.  The  Socialists  would  no 
longer  try  to  permeate  and  to  dominate  them.  They 
would  become  peaceful  institutions  engaged  exclusively  in 
promoting  the  social  welfare  of  the  workers  and  the 
prosperity  of  the  industry  in  which  their  members  are 
engaged.  In  character  and  in  scope  they  would  resemble 
the  Manufacturers’  Associations,  Employers’  Associations, 
and  Chambers  of  Commerce,  with  which  they  would  work 


LABOUR  UNREST:  THE  CURE 


013 


hand  in  hand.  Socialism,  Nationalisation,  Syndicalism, 
and  Bolshevism,  would  lose  their  attractiveness.  The 
business  of  those  agitators  who  live  by  creating  strife 
between  capital  and  labour  would  be  gone  for  ever. 

The  introduction  of  practically  universal  profit-sharing 
would  at  last  realise  the  hope  that  employers  and  employed, 
rich  and  poor,  would  cordially  and  fraternally  co-operate, 
which  has  been  expressed  by  the  greatest  statesmen  and 
thinkers  from  Plato  and  Aristotle  to  Abraham  Lincoln 
and  Roosevelt.  A  new  industrial  era  would  begin. 

I  have  put  forward  the  ideas  expressed  in  the  foregoing 
in  the  hope  that  the  plan  proposed  will  solve  the  industrial 
problem,  establish  permanent  harmony  between  capital 
and  labour,  and  introduce  all  the  benefits  claimed  by  the 
advocates  of  Socialism  without  leading  to  robbery  and 
confusion,  and  all  the  benefits  claimed  by  the  champions 
of  Nationalisation  without  introducing  the  blight  of 
bureaucracy.  I  have  put  forward  these  ideas  in  the  hope 
that  the  plan  proposed  will  make  capital  and  labour,  the 
two  forces  which  seem  eternally  divided  and  irreconcilable, 
one  and  indivisible,  and  that  it  will  greatly  strengthen 
the  beneficenl  power  of  individualism  while  divesting  it 
of  the  stigma  of  greed  and  injustice  which  its  enemies  have 
striven  to  fasten  upon  it.  I  hope  that  the  arrangement 
outlined  will  be  found  to  be  practical,  workable,  and 
logical. 


40 


. 


*  .  .  .. 


.  - 


•  *  •  .  i 1 1  vJiiaiS 

V-. 


.. 


« . 


ANALYTICAL  INDEX 


Note. — The  letter  f  following  a  page  number  signifies  “  and  following  page  ”/ 
the  letters  ff  signify  “  and  following  pages.” 


Africa,  coal  resources  of  . . 

„  iron  ore  resources  of 

Agricultural  and  Mechanical  Colleges  in  United  States 
Agricultural  Machinery  in  Germany 

„  „  in  United  States 

Agriculture,  American  Industrial  Commission  on 
„  Mosely  Commission  on 

„  President  Roosevelt  on 

British  and  German  compared 
German,  productivity  of 
inefficiency  of  British 
progress  of,  in  Italy  . . 

progress  of,  in  United  States  . .  62  ff,  90  ff 
revolutionised  by  Americans 
Russian 

science  applied  to,  in  United  States 
United  States  Department  of 
Alsaue- Lorraine, ^attempts  to  Germanise 
„  education  in 

emigration  from 
foreigners  in 
growth  of  towns  in 
history  of 

importance  of,  to  France 
is  French  in  inclination 
language  position  in 
loss  of  population  in 
minerals  in 
population  of 
„  racial  position  of 

„  the  problem  of  . . 

America,  iron  ore  resources  of 
Asia,  coal  resources  of 
„  iron  ore  resources  of  . . 

Associations,  six  great  German  economic,  on  coal  and  iron 
Australia,  coal  resources  of 
„  iron  ore  resources  of 
Austria-Hungary,  coal  production  of 
„  coal  resources  of 

„  iron  ore  resources  of 

„  iron  production  of 

615 


99 


99 


99 

99 


99 


PAGES 

..  25 

..  31 

155  ff 
..  355 

63,  94  ff 
..  171 

174  ff 
169  ff 
97  f,  493  ff 
97  f,  493  ff 
71  ff,  493  ff 
299  ff 
160  ff,  382  ff 
94  ff,  160  ff 
406  ff 


92  f, 
91  f, 


160  ff 
160  ff 
281  ff 
. .  285  f 
278  ff 
280  ff 
283  ff 
. .  274  f 
291  ff 
..  275 

. .  276  f 
278  ff 
287  ff,  340  ff 
276  ff 
276  ff 
272  ff 

30 

25 

31 
35  f 

26 

31 
20 
24 
30 

32 


616 


INDEX 


Belgium,  coal  production  of 
coal  resources  of . . 
iron  ore  resources  of 
iron  production  of 
Briey,  iron  mines  of 
British  Empire,  coal  production  of 
„  coal  resources  of 

conservation  of  national  resources  of 
insufficiency  of  railways  of 
„  iron  ore  resources  of 

,,  merchant  marine  and 

„  possible  expansion  of  wealth  of 

44  ff,  68  ff,  103  f,  195 

,,  true  wealth  of 

Bryce,  Lord,  on  American  education 
,,  on  American  labour 


99 


Canada,  coal  resources  of  . . 

„  iron  ore  resources  of 
Canadians,  French,  increase  of 
Canals  and  waterways,  American . . 

„  „  British 

,,  ,,  Russian  . . 

Capital  and  capitalism,  necessity  of 
Carnegie,  gifts  of,  to  education 

,,  on  labour  problems  552  f,  554, 

China,  coal  resources  of 
„  iron  ore  resources  of 

„  markets  of,  and  Japan 

Coal  and  iron  and  population 
„  „  importance  of 

Coal  consumption  in  United  Kingdom 

„  „  in  various  countries  compared 

Coalfields  and  population 
„  of  Germany 


PAGES 

..  20 
..  24 

..  30 

..  32 

33  f,  268,  288 
..  20 
..  24  ff 
398  f 
..  88  f 
..  30  f 
475  ff 


ff,  398  f,  487  ff 
. .  38  £E 
..  157 f 
. .  551 


« •  . «  . «  25 

. 30 

. 250 

83  ff,  379,  395  f 
..  71  ff,  83,  466  ff 

.  405  f 

550  ff 
151 

62,  569,  574,  594,  595  f,  597  ff,  603 

•  •  j  •  « •  25 

*  •  ••  . «  31 

218  ff 

.  260  f 

. .  13  ff,  35  ff,  292, 372 
. .  19  f,  263  ff,  447 

. .  263  ff,  447 


,,  of  the  world 

Coal  prices  in  England  and  the  United  States  compared 
Coal  problem,  British  and  Sankey  report 

Coal  production  and  consumption  in  England,  Germany,  and  United 

States  compared  . .  . .  . .  . .  . .  20,  263  ff,  359  ff 


. .  260 
332  ff 
. .  23  ff 
194,  448,  457 
.  443  ff,  530  f 


Coal  production  of  Austria-Hungary 
of  Belgium 

of  England  and  United 
of  France 
of  Germany 
of  Russia 

of  the  United  States 
of  the  world 
Coal  resources  of  Africa 

of  Australia 
of  Belgium 
of  Canada  . . 
of  China 
of  England 
of  Europe  . . 


States  compared 


20,  24 
20,  24 
192 

20, *24, 264 
20,  24,  264,  335,  359  ff 
20,  24,  409  ff 
20, 22, 263  ff 
21,  454  f 
..  25 

...  26 
24,  266 
..  25 

..  25 

24,  192,  266 
24  f,  332 


INDEX 


617 


Coal  resources  of  France  . . 

„  ,,  of  Germany 

,,  ,,  of  Italy 

,,  ,,  of  Japan 

,,  „  of  Russia  . . 

,,  „  of  the  United  States 

„  ,,  of  the  world 

Coal  Trade,  American,  future  of  . . 

Combination,  advantage  of,  in  industry . . 
Competition  versus  co-operation  . . 

Conciliation,  the  policy  of  . . 

Co-operation  versus  competition  . . 

Cotton  Industry,  British  . . 

,,  „  British  and  American  compared 

,,  , ,  Japanese  •  *  * « 

Currency,  depreciation  of  the 


Debt,  national,  problem  of  the  British 


PAGES 

24,  266 

27  f,  30,  266,  332  ff 

25,  266 

. .  25,  428  ff 

24,  266 
. .  25,  263  £E 

. .  23  ff 
..453  ff 
583  ff 
583  ff 
597  ff 
583  ff 

125  f,  127,  199  ff 
199  ff 

215  ff,  433,  435  ff 
42  f,  46 

. .  38  ff 


..  14  f 
59  ff,  102  f,  132  ff 
57  ff,  66, 115  f,  132  ff,  399 

145  ff 
..157  f 


162  ff 
. . 159  f 
143  ff 
144  f,  178  f 
..  312 

. .  304  f 
65,  99 
99 

..  59  f 


Economic  factor  and  history 
Economic  policy,  American 
„  „  British 

Education,  American 

„  Lord  Bryce  on 

,,  Mosely  Commission  on 

„  Professor  Caulery  on 

and  economic  success. . 
defects  of  English 
in  Italy 

Electric  Power  in  Italy 

„  „  in  United  States  . . 

„  „  ,,  „  possibilities  of 

Emigration,  British 
Empire,  British.  See  British  Empire. 

Engine  power  in  England  and  the  United  States  compared  123,  185  ff,  523  ff 
,,  used  in  Germany  . .  . .  . .  . .  . .  . .  355 

,,  used  in  United  States  . .  . .  . .  . .  65,  99 

England,  agriculture  of  . .  . .  . .  . .  . .  . .  71  ff,  493  ff 

„  of,  and  German  agriculture  compared  . .  97  f,  493  ff 
canals  of  . .  . .  . .  . .  . .  . .  71  ff,  83,  466  ff 

coal  consumption  in  . .  . .  . .  19  f,  263  ff,  359  ff,  477 

coal  problem  and  Sankey  report  . .  . .  . .  443  ff 

coal  production  in,  and  other  countries  compared  .  .  20  f,  192, 

359  ff,  454  f 

cotton  industry  of  . .  . .  . .  . .  125  f,  127,  199  ff 

„  „  and  America  compared  . .  . .  199  ff 

education  in,  defects  of  . .  . .  . .  144  f,  178  f 

emigration  from  . .  . .  . .  . .  . .  . .  59  f 

growth  of  population  of  . .  . .  . .  . .  254  ff 

„  „  and  of  France  compared  . .  . .  254 

iron  ore  resources  of  . .  . .  . .  . .  . .  30,  339 

iron  production  of  . .  . .  . .  32,  33,  265,  359  ff,  527  ff 

land  and  housing  problem,  rural  . .  . .  . .  492  ff 

land  and  housing  problem,  urban  . .  . .  . .  504  ff 

national  debt,  problem  of  the  . .  . .  . .  . .  . .  33  ff 


618 


TNDEX 


PAGES 

England,  national  income,  growth  of  . .  . .  . .  . .  . .  45 

national  tax  revenue,  growth  of  . .  . .  . .  46,  69  f 

national  wealth,  growth  of  . .  . .  . .  . .  . .  44 

national  wealth,  possible  development  of 

46  ff,  68  ff,  103  f,  195  ff,  398  f 
output  per  worker  in  . .  . .  . .  120,  185  ff,  517  ff 


population,  increase  of  . . 

„  „  and  of  United  States 

railw'ay  system  of 
restriction  of  output  in 
shipping  industry  of 
transport  system  of 
true  wealth  of 


France  and  Alsace-Lorraine 

„  backwardness  of,  in  manufacturing 
Fiance,  coal  production  of . . 
coal  resources  of  . . 
economic  position  and  future  of 
effect  of  Franco-German  war  on 
greatness  of,  indispensable  to  Europe  . . 
iron  ore  resources  of 
iron  production  of 
man  power  of 

population,  growth  of,  and  of  Germany  compa 
poverty  of,  in  coal 
stagnation  of  population  of 
Free  Trade  and  Protection . .  57  ff,  65  f,  115,  132  ff, 
„  „  „  Professor  Taussig  on 

Freight  rates,  American  . . 


16  f,  254  ff,  375 
ompared  . .  375 

71  ff,  460  ff 
123  ff,  526  ff 
113,  475  ff 
71  ff,  460  ff 
..  38  ff 

269  f,  272  ff 
..  261  f 
20,  24,  264 
24,  266  f 
243  ff 
248,  269 
247  ff 
30,  267,  289  ff 
32,  265,  289  ff 
247  ff 

red  ..  247  ff,  273 
266  f,  290  f,  292  f 
247  ff 
199  ff,  228  ff,  593  f 
134 
82  ff 


99 


Germans,  historic  character  of  the 
Germany,  agricultural  machinery  in 

agricultural  prosperity  of  . .  . .  97  f,  256, 

agriculture  of,  and  British  agriculture  compared 
and  a  War  Indemnity 
canals  of 

causes  of  prosperity  of 
coal  production  of 
coal  resources  of 
commerce  of 
engine  power  in 
estimated  wealth  of 
foreign  trade  of 
growth  of  population  of, 
growth  of  towns  in 
historic  character  of 
harvests  of 

increase  of  population  of 
indemnity  for  war  damage 
inland  shipping  of 
iron  fields  of 
iron  ore  imports  of 
iron  ore  resources  of  . . 
iron  production  of 


and  of  France  com 


243  ff 
355,  357 
350  ff,  493  ff 
97  f,  493  ff 

329  ff,  349  ff 

364  f 

330  ff,  346  ff 
20,  335,  359  ff 

24,  28,  333  ff 
363  ff 
..  362 

368  ff 

365  f 
247  ff,  273 

257  ff 
243  ff 
97  f,  351  ff 
f,  248,  257  ff 
329  ff,  349  ff 
.  . .  364  f 

. .  340 

. .  341  f 

90  ^4.0  ff 

32,  265,*  290  i,  359  ff 


aared 


17 


INDEX 


619 


PAGES 

Germany,  live  stock  of .  . .  . .  . .  352 

„  manufacturing  industries  in  . .  . .  . .  . .  357  ff 

„  mineral  wealth  of  . .  . .  . .  24,  28,  30,  331  ff,  348 

„  national  advantages  of,  for  industry,  agriculture  and  trade 

262,  346  ff 

„  national  income  of 

„  natural  wealth  of 

„  policy  of,  regarding  coal  and  iron  mines 
„  potash  production  in  . . 

,,  potash  salt  deposits  in  . . 

,,  raw  materials  used  by  . . 

,,  railway  system  of 


rise  of 


. .  369  f 
29  ff,  346  ff 
34  ff,  290  f 
..  345 

343  ff 
..  363 

..  364 

400  ff 
..  367 

. .  364  £E 
..  354 

331  ff,  348 
329  ff,  349  ff 
354,  356 
243  fE 
..  130 


,,  savings  banks  deposits  in 

„  shipbuilding  and  shipping  industries  of 

„  sugar  production  in 

„  value  of  minerals  of 

,,  war  indemnity  and 

,,  workers  employed  in  . . 

,,  world-conquering  traditions  of 
Gompers,  Samuel,  on  American  labour  . . 

Government  committees,  British,  on  industry  and  labour  450,  452,  465, 
469  f,  471  f,  472  f,  480,  481,  482,  485,  486,  487,  497  f,  509  f, 
511,  527  ff,  532  ff,  581  f,  588  f,  590  ff 
Great  Britain.  See  England. 

Hadley,  Professor  557,  568,  571,  574,  580,  581,  584,  586  f,  595,  597,  602 
Henderson,  Arthur. .  . .  . .  . .  . .  . .  . .  . .  546  f 

Horse-powers,  employment  of,  in  the  United  States  99  ff,  123,  187  ff,  523  ff 
in  England  and  United  States  compared  123,  187  ff,  523  ff 
in  Germany  . .  . .  . .  . .  . .  . .  362 

‘  “  '  ~  65 

501,  504  ff 
304  f 
99  ff 


99 

99 

99 


99 

99 

99 


increase  of,  in  United  States 
Housing  problem,  British 
Hydro-electric  power  in  Italy 

„  „  „  in  United  States  . . 

Income,  national,  of  England,  growth  of 
India,  British,  coal  resources  of  . . 

„  „  iron  ore  resources  of 

Industries.  See  Manufacturing  Industries,  Production 
Countries. 

Iron,  coal  and  population  . . 

Iron  and  coal,  importance  of 

Iron  and  steel,  prices  of,  in  the  United  States  . . 

Iron  industry,  British,  restriction  of  output  in  . .  127, 
,,  ,,  German  ..  ..  ..  **  . 

,,  ,,  Russian  ..  ..  ..  ..  . 

Iron  ore  production  in  various  countries  compared 
„  resources  of  Europe 

„  „  of  the  world 

Iron  production  of  various  countries  compared 
„  „  of  the  world 

Italians  in  foreign  countries 
Italy,  coal  resources  of 
„  dense  population  of 


and  Individual 


45 

25 

31 


260  f 

.  13  ff,  35  f,  292, 372 
81,  133 
128  ff,  527  ff,  536  ff 
. .  290  f,  359  ff 

. 410  f 

289  ff 
30,  339 

. 29  ff 

32,  265,  289  ff 
29,  32 
316  f,  323  f 
25,  303 
298,313 


620 


INDEX 


PAGES 


Italy,  difficulties  of,  after  the  war 

•  • 

320  ff 

99 

,,  of  agriculture  in 

•  • 

299  ff 

99 

,,  of  developing  trade  of 

•  • 

306  ff 

99 

„  of  industries  in 

•  • 

303  ff 

99 

economic  position  and  future  of  . . 

•  • 

295  ff 

99 

electrical  possibilities  in 

•  • 

304  f 

99 

emigration  from 

•  • 

309  ff,313  ff,  323  ff 

99 

enigmatic  policy  of,  in  1914 

•  • 

295  ff 

99 

great  record  of 

•  • 

. .  327  f 

99 

iron  ore  resources  of 

#  # 

30, 303 

99 

nature  of  foreign  trade  of  . . 

•  • 

319  ff 

99 

pioneer  activities  of 

•  • 

. .  326 

99 

poverty  of,  and  its  causes  . . 

•  • 

298,  313 

99 

poverty  of  fisheries  of 

•  • 

. .  302  f 

99 

„  of,  in  minerals 

•  • 

. .  303  f 

99 

prevalence  of  malaria  in 

•  • 

. .  299 

99 

progress  of  agriculture  in  . . 

•  • 

. .  301 f 

99 

„  of  banking  in 

•  • 

...  303  f 

99 

„  of  education  in  . . 

•  • 

. .  312 

99 

,,  of  foreign  trade  of  . . 

•  • 

806,  308 

99 

„  of  industries  in  . . 

•  • 

305  ff 

99 

,,  of  thrift  in 

•  • 

309  ff 

99 

should  be  given  the  territory  and  resources  she  needs  . .  324  ff 

Japan 

and  Chinese  markets 

• 

218  ff 

99 

coal  resources  of 

#  # 

. .  25,  428  ff 

99 

cotton  industry  of  . . 

#  # 

215  ff, 433,  435  ff 

99 

economic  position  and  future  of  . . 

..426  ff 

99 

factories  in  . . 

0  0 

. .  430 

99 

foreign  trade  of 

•  • 

433  ff 

99 

iron  resources  of 

•  • 

..  31,428  ff 

99 

mineral  production  of 

•  • 

429  ff 

99 

shipbuilding  in 

•  •  * 

. .  431 

99 

wages  in 

. . 

431  ff 

Labour  problem,  the  . .  . .  . .  . .  180  ff,  516  ff,  545  ff,  580  ff 

„  ,,  British  Government  Committees  on,  450, 452, 527  if,  532  if, 

581  f,  588  f,  590  if 

,,  „  Bryce,  Lord,  on  . .  . .  . .  . .  . .  551 

„  „  Carnegie,  on  552  f,  554,  562, 569,  574,  594,  595  f,  597  ff,  603 

„  ,,  Hadley,  Professor,  on  557,  568,  571,  574,  580,  581,  584, 

586  f,  595,  597,  602 


99 
99 
99 
9  9 
99 
99 


Henderson,  Arthur,  on 
Leverhulme,  Lord,  on  . . 
Lincoln,  Abraham,  on  . . 
Outerbridge,  Mr.,  on  . . 
Roosevelt,  President,  on 
Wilson,  President,  on  . . 


. .  . .  . .  . .  546  f 

558,  560  ff,  569,  571,  595,  601 

.  550  f 

rao 

!!  !!  584’ ff,  600,"  603  f 

. .  . .  . .  . .  605 


Labour  unrest  . .  . .  . .  . .  . .  . .  . .  545  ff,  580  ff 

Laissez-faire  policy  . .  . .  . .  57  ff ,  66,  115  f,  132  ff,  199  ff,  228  ff,  399 

Land  and  housing  problem,  British  . .  . .  . .  . .  492  ff,  504  ff 

Leverhulme,  Lord  . .  . .  . .  . .  558,  560  ff,  569,  571,  595,  601 

Lincoln,  Abraham,  on  labour  . .  . .  . .  . .  . .  . .  550  f 

Looms  in  England  and  United  States  compared  . .  . .  . .  207  ff 


INDEX 


621 


Louisiana  purchase,  history  of 
,,  value  of  . . 


PAGES 

52  ff 
55  f 


Machinery  and  Agriculture  . .  . .  . .  . .  63,  94  ff,  355 

„  in  England  and  United  States  compared  . .  123,  187  ff,  523  ff 
„  used  in  United  States  . .  . .  65,  99,  123,  187  ff 

Manufacturing  industries,  British  and  American  compared 

105  ff,  185  ff,  199  ff,  517  ff,  555 
„  „  of  the  United  States,  progress  of 

64  f,  105  ff,  185  ff,  199  ff 

Mosely  Education  Commission  . .  . .  . .  . .  162  ff,  174  ff 


National  Debt.  See  Debt,  National. 
Nationalisation  of  Industries 

„  ,,  Bismarck  on 

„  „  Carnegie,  on 

„  „  Professor  Hadley,  on 

Napoleonic  war,  cost  of,  to  England 


546  f,  572  ff 
. .  573  f 
. .  574  f 
..  574 

..  45 


Output,  British  and  American,  per  worker  compared 

107  ff,  119  ff,  185  ff,  199  ff,  517  ff 
„  restriction  of,  in  England  . .  123  ff,  207  ff,  526  ff,  567  ff 

Policy,  economic,  of  England  57  ff,  66,  115  f,  132  ff,  199  ff,  228  ff,  399, 593  f 


economic,  of  the  United  States 
Political  economy,  disastrous  influence  of  British 
Population,  British,  in  United  States 
density  of,  in  Italy 
growth  of  about  the  coalfields 

and  manufacturing  industries 
in  England 

in  England  and  France  compared 
in  France  and  Germany  compared 
in  French  Canada 
in  Germany 
in  the  United  States 


59  ff,  102  f,  132  ff 
57  ff,  65  f,  115  f 
..  59  f 
298,  313 
260  ff,  269  f 
260  ff 
. .  16  f,  254  ff 
. .  . .  254 

247  ff,  273 
. .  250 

17  f,  248,  257 
18,  49,  67,  373  ff 


in  the  United  States  and  other  countries  com¬ 
pared  . .  . .  . .  . .  . .  373  ff 

laws  of,  Adam  Smith  on  . .  . .  . .  . .  252  f 

of  Alsace-Lorraine  . .  . .  . .  . .  . .  276  ff 

prospective  increase  of,  in  the  United  States  . .  67,  373  ff 

stagnation  of,  in  France  . .  . .  . .  . .  247  ff 

Potash  in  Germany  . .  . .  . .  . .  . .  . .  . .  343  ff 

Prices,  historic  changes  of  . .  . .  . .  . .  . .  . .  42  f 

,,  of  coal  in  England  and  United  States  compared  . .  . .  194 

,,  of  cotton  goods  in  England  and  Unites  States  compared  210  ff,  225  f 

„  of  iron  and  steel  in  United  States  . .  . .  . .  81,  133 

„  of  trust  products  in  the  United  States  ..  ..  ..  133  ff 

Production,  agricultural,  in  the  United  States  . .  . .  . .  63  f,  93  ff 

,,  ,,  inefficiency  of  British  . .  . .  97  f ,  493  ff 

„  great  possible  expansion  of,  in  Great  Britain 

47,  105  ff,  185  ff,  199  ff,  517  ff 
Production,  industrial,  inefficiency  of  British  105  ff,  119  ff,  185  ff,  199  ff,  517  ff 
„  „  in  England  and  United  States  compared 

107  ff,  185  ff,  199  ff,  517  ff 


622 


INDEX 


Production,  industrial,  in  United  States 


PAGES 


.  .64  ff,  106  ff,  114  ff,  185  ff, 
199  ff,  517  ff 

,,  on  large  scale,  advantages  of  . .  . .  . .  135  f,  532  ff 

,,  restriction  of,  in  England  . .  123  ff,  207  ff,  526  ff,  567  ff 

Protection  and  Free  Trade  57  ff,  65  f,  115,  132  ff,  199  ff,  228  ff,  399,  593  f 


Professor  Taussig  on 

Railways,  British  and  American,  compared 
„  equipment  of  United  States  . . 

,,  inefficiency  and  insufficiency  of  British 
„  of  British  Empire 

,,  of  Germany 

,,  of D  Russia 

„  of  the  United  States 

Revenue,  national,  increase  of  English 
Rhenish  Westphalian  coal  and  iron  district 
Rockefeller,  gifts  of,  to  education 
Rolling  stock,  American  . . 

„  ,,  British  and  American  compared  . . 

Roosevelt,  on  United  States  Department  of  Agriculture 

,,  views  of,  on  labour  . .  . .  . .  . .  584 

Ruhr  Coal  District  . . 

Russia,  agriculture  of 

,,  canals  and  waterways  in  . . 

,,  coal  and  iron  in 

,,  coal  production  of . . 

,,  coal  resources  of  . . 

,,  cotton  production  of 
,,  economic  policy  and  future  of 
,,  German  and  British  trade  with 
,,  German  influence  in 

„  iron  ore  resources  of  . . 

„  iron  production  of . . 

,,  mineral  production  of 
,,  railways  in 

Russo -German  relations  in  the  future 

Science  and  agriculture  in  the  United  States 
Shipbuilding  and  shipping  industry,  in  England  and  Unitec 

compared 

,,  ,,  industry  of  Germany 

,,  „  in  England  ..  ..  ..113, 

,,  ,,  in  United  States 

Smith,  Adam,  teachings  of 
,,  ,,  on  population 

Socialism  and  labour 


..  134 

73  ff,  460  ff 
..  75  ff 
73  ff,  460  ff 
..  88  f 
..  364 

..  411  f 
61  f,  73  ff 
46,  69  f 
260  f,  334  ff 
..  151 

..  75  ff 
..  75  ff 
169  ff 
ff.  600,  603  f 
260  ff,  334  ff 
406  ff 
. .  405  f 
409  ff 
20,  24 
..  24 

..  409 

400  ff 
. .  421 f 
413  ff 


..  30 

..  32 

409  ff 
..  412 f 
400  ff 

92  f,  160  ff 
States 

228  ff 
364  ff 
228  ff,  475  ff 
131,  228  ff 
..  57  f 
. .  252  f 
545  ff,  580  ff 


Tariff  problem 


57  ff,  65  f,  115,  132  ff,  199  ff,  228  ff,  399,  593  f 


>5 


and  the  cotton  trade 
and  the  shipping  trade 
Towns,  German,  growth  of 
Trusts  in  the  United  States 
,,  necessity  of 

United  Kingdom.  See  England. 

United  States,  agricultural  and  mechanical  colleges  in. . 


199  ff 
228  ff 
257  ff 
132  ff 
583  ff 


155  ff 


INDEX 


623 


United  States, 


99 


99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 


99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 

99 


agricultural  machinery  in . . 
agricultural  production  in 
agricultural  progress  of 


agriculture,  revolutionised  by  machinery 
building  industry  in 
canals  and  waterways,  how  utilised 
coal  prices  in,  and  in  England  compared 
coal  production  of 

„  ,,  of,  and  of  England  com 

,,  resources  of  . . 


PAGES 

63,  94  ff 
63  f,  93  ff,  380  f 
62  f,  90  ff,  160  ff,  382  ff 


,,  trade,  future  of 

•  • 

453  ff 

conservation  movement  in 

•  • 

385  ff 

„  „  Roosevelt  on  . . 

•  • 

386  f 

cotton  consumption  in 

0  0 

..  222 

cotton  industry,  and  British  compared 

0  0 

199  ff 

„  ,,  progress  of 

0  0 

202  ff 

department  of  Agriculture 

0  0 

91  f,  160  ff 

economic  policy  of 

59  ff, 

102  f,  132  ff 

education  in 

•  • 

145  ff 

„  gifts  and  bequests  to  . . 

•  0 

..  150 f 

,,  Industrial  Commission  on 

0  0 

..  171 

,,  Lord  Bryce  on 

0  0 

. .  157  f 

„  Mosely  Commission  on 

0  0 

162  ff,  174  ff 

„  Professor  Caullery  on 

0  0 

159  f 

„  progress  of 

0  0 

147  ff 

electrical  power  used  in  . . 

0  0 

65,  99 

expenditure  on  education 

0  0 

. .  147  f 

experimental  stations  in  . . 

0  0 

163  f,  169 

fisheries  in  . . 

0  0 

..  106 

forestry  in  . . 

0  0 

106,  380  f 

freight  rates  in 

0  0 

82 

geological  survey  of 

0  0 

. .  164  f 

horse-powers  used  in 

0  0 

65, 99 

idealism  in  . . 

0  0 

. .  154  f 

illiteracy  in . . 

0  0 

..  146 

immigration  into  . . 

•  • 

..  379 

industrial  production  in  . .  . .  64  ff, 

106  ff, 

185  ff,  380  f 

industrial  supremacy,  causes  of  . . 
inland  waterways  of 

•  • 

136  ff,  146  ff 

0  0 

379,  395  f 

Interstate  Commerce  Commission 

0  0 

..  172 

iron  industry  of,  how  developed 

0  0 

..  83  ff 

iron  production  of . .  . .  32,  83  ff , 

110,  115,  265,  289 

labour,  Samuel  Gompers  on 

•  • 

..  130 

land  tenure  in 

0  0 

..  90 

large  scale  of  production  in 

0  0 

. .  135  f 

manufacturing  industries,  progress  of  . . 

64  ff, 

114  ff,  380  ff 

mineral  production  in 

0  9 

106,  380  f 

national  wealth  of 

50  ff, 

61  ff,  73  fl 

national  wealth,  increase  of 

50  ff, 

61  ff,  73  ff 

natural  resources  of 

•  0 

373  ff 

„  „  conservation  of 

0  0 

385  ff 

output  per  worker  in 

120, 

185  ff,  517  ff 

population,  comparative  increase  of 

•  • 

374  ff 

„  future  possibilities  of 

•  • 

49,  376  ff 

,,  increase  of  . . 

18,  49,  373  ff 

. .  94  ff 
..  Ill 
. .  83  ff 
194,  448,  457 
20,  22,  192,  380 
pared  20,  192,  264 
25,  26 


624 


INDEX 


United  States,  population  of,  and  of  other  countries  compared 
„  prices  of  iron  and  steel  in 
„  productive  supremacy  of  . . 

„  prosperity  of  people  in 

„  prospective  increase  of  national  wealth  of 

„  ,,  „  of  population  of 

„  railways  of  . . 

„  railway  equipment  of 

„  schools  in  . . 

„  scientific  agriculture  in 

„  scientific  departments  of  . . 

„  shipbuilding  and  shipping  industries  in 
„  trusts  in 

„  Universities  and  high  schools  in 

,,  University  professors  in  . . 

,,  wages  in  ..  ..  ..  ..  121  f,  182 

„  waste  in  agriculture 

„  „  in,  by  fire  . . 

,,  ,,  in  forestry 

„  ,,  in  neglect  of  rivers 

,,  waterways  and  canals  of,  how  utilised  . .  83  f 

„  water  powers  possessed  by 

„  yield  of  crops  in  . . 

Universities,  American 

Unrest  of  labour 


PAGES 

373  ff 
81, 133 
103, 380  f 
116  ff 
..  67  f 
67,  373  ff 
61  f,  73  ff 
75  ff 
145  ff 
92  f,  160  ff 
159  ff 
131,  228  ff 
132  ff 
150  ff 
154  ff 
ff,  204,  206 

390  ff 
. .  396  f 

391  ff 
. .  395  f 

379,  395  f 
..  99  ff 
91,  160  ff 
150  ff 
545  ff,  580  ff 


121  f,  182  ff, 


Wages.  See  also  Labour. 

Wages  in  United  States 

„  „  „  and  in  England  compared 

War,  economic  causes  of  . . 

Water  powers  possessed  by  Italy 

„  ,,  ,,  by  the  United  States  . . 

Waterways.  See  Canals. 

Wealth,  national,  how  created  and  destroyed  . .  40  ff,  60  f,  72  f,  173  ff 

„  „  of  British  Empire  . .  48  ff,  68  ff,  103  f,  195  ff,  398  f 


204,  206 
..  206 
..  14  f 
304  ff 
..  99  ff 


99 

99 


of  England  . .  44,  46  ff ,  68  ft 

of  France 
of  Germany 
of  Japan 
of  Russia 

of  the  United  States  . . 
real  and  conventional,  compared 
truo  nature  of  . . 


taxation  of 


103  f , 195  ff, 398  ff 
. .  44 

368  ff 
426  ff 
403  ff 
ff,  73  ff 
..  39  ff 
..  40  ff 
564  ff 


50  ff,  61 


BILLING  AND  SONS,  LTD.,  PRINTERS,  GUILDFORD,  ENGLAND 


CONTENTS  OF 

“  THE  FOUNDATIONS  OF  GERMANY,” 

BY  J.  ELLIS  BARKER 

CHAPTER 

I.  The  Foundations  of  Germany’s  Strength,  Wealth, 
and  Efficiency 

II.  The  Foundations  of  Germany’s  Diplomacy 

III.  The  Policy  of  Bismarck  and  of  William  II 

IV.  The  Foundations  of  German  Education,  and  of  the 

National  Character 

V.  The  German  Army  and  the  General  Staff 

VI.  How  Education  has  Degraded  the  German  People 

VII.  How  Germany  makes  War — The  Secret  History  of  1870 

VIII.  How  Germany  makes  Peace — The  Secret  History  of 
1866 

IX.  How  Germany  makes  War  in  Peace — Her  Policy 
towards  the  United  States  since  1888 
X  .The  Influenceof  Machiavelli  upon  German  Statecraft 

XI.  The  Influence  of  Luther  upon  German  National 
Character 

XII.  Prussia’s  Downfall  in  1806 — Its  Causes,  its  Conse¬ 
quences,  its  Lessons 

XIII.  Democratic  Germany — a  Glance  into  the  Past  and 

into  the  Future 

THE  MOST  IMPORTANT  PRUSSIAN  STATE  PAPERS 

XIV.  Frederick  the  Great’s  Political  Testament  of  1776. 

(Expose  du  Gouvernement  Prussien,  &c.) 

XV.  Introductory  Chapter  of  Frederick  the  Great’s 
Posthumous  Memoirs  (Histoire  de  mon  Temps), 
written  for  the  Guidance  of  his  Successors 

XVI.  Frederick  the  Great’s  Memoir  on  Government  and 
•  on  the  Duties  of  Sovereigns  (Essai  sur  les  Formes 
de  Gouvernement,  &c.) 

XVII.  Frederick  the  Great’s  Directions  for  the  Education 
of  Princes  (Instruction  au  Major  Borcke) 

XVIII.  Frederick  the  Great’s  Instructions  in  case  of  his 
Death  in  Battle,  Defeat,  or  Capture 


XIX.  The  War  Aims  of  the  German  Business  Men 
INDEX 


BOOKS  ON  ECONOMICS  AND  LAW 


By  W.  JETHRO  BROWN,  LL.D.,  Litt.D. 

Professor  of  Law  in  the  University  of  Adelaide. 

THE  PREVENTION  AND  CONTROL  OF  MONOPOLIES. 

The  purpose  of  this  work  is  to  discuss,  and  to  state  solutions  of,  those 
problems  of  modern  statesmanship  which  arise  out  of  the  growth  of 
monopolies.  6s.  net. 

THE  UNDERLYING  PRINCIPLES  OF  MODERN 
LEGISLATION. 

“  Mr.  Brown  is  quite  as  much  a  humanist  as  a  lawyer.  His  style  is 
touched  with  a  fine  emotion.  He  brings  a  clear,  able,  philosophic 
mind  to  his  examination  of  contemporary  thought.” — Pall  Mall 

Gazette.  7s.  6d.  net. 

• 

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